17. Sergian, Inc. makes two products, Clothing and Cosmetics, from a joint operating process. For the month of August 2019, the total joint costs of processing was P120,000 and the costs of further processing after the point of split-off, as well as other relevant data are shown below: Clothing 1,600 Cosmetics Units after split-off Sales price per unit Further processing costs 800 P200 P400 P100,000 P140,000 The company uses the net realizable value method for allocating the joint costs of processing. For the month of August 2019, the joint cost allocated to product Clothing was: a. P60,000 b. P66,000 c. P72,000 d. P80,000
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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