36. Each finished product of Carolina Cup requires two pounds of Product A and five pounds of Product B. Throughout the year, the company purchases enough raw materials to produce 500 finished products. Each pound of Product A costs $7, and each pound of Product B costs $8. The beginning and ending balances of raw materials inventory totaled $8,900 and $10,100, respectively. Calculate the cost of direct materials used for the year. 37. Carolina Cup employs five production employees who are paid an hourly wage of $9 per hour. Each employee works 800 hours a year. The company also incurred $42,000 of overhead, half of which should be allocated to the factory. Using the cost of direct materials calculated in Exercise 36, determine the total manufacturing costs for the year. 38. Carolina Cup's beginning work in process inventory had a balance of $45,750. The ending work in process inventory was exactly % of the beginning balance. Using the manufacturing costs incurred calculated in Exercise 37, determine the cost of goods manufactured during the year.
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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