4. As of Sept. 1, 2018, there are two(2) jobs in process with accumulated prime costs as follows: 359 J ob No. 71 Job No. 72 Number of units 6,000 5,000 Direct materials P5,000 P4,000 Direct labor P2,000 P1,800 Job Order No. 72 is special because of its strict specifications. Factory overhead is charged at PO.40 per unit and includes a PO.03 provision for defective work. The prime cost incurred in Sept., 2018 are as follows: Job No. 71 Job No. 72 Job No. 75 Job No. 76 Number of units 3,000 2,000 Direct materials P4,500 P2,500 P3,000 2,000 P5,000 Direct labor 3,000 2,000 1,500 Some units are found to have imperfections and the corresponding prime costs incurred in reprocessing are as follows: Job No. 71 Job No. 72 Job No. 75 Number of units with imperfections Prime costs in reprocessing: 50 80 40 Direct materials P500 P1,500 P300 Direct labor 200 800 100 Jobs No. 71, 72, and 75 were completed. The unit cost in each completed job must be: Job No. 71 Job No. 72 Job No. 75 P2.40 P3.60 a. P2.57 b. P2.37 P3.13 P2.54 c. P2.49 P3.60 P2.57 d. None of the above; answer is
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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