42 ABC Company uses a job-order costing system and a predetermined overhead rate based on machine hours. At the beginning of 2022, ABC estimated that manufacturing overhead for the year would be P4,800,000 and machine hours would be 80,000. The following information pertains to April 2022: Job #1 Job #2 Job #3 Work in process, April 1 P320,000 P520,000 P760,000 April production: Direct materials requisitioned 80,000 96,000 144,000 Direct labor costs 48,000 72,000 90,000 Machine hours 400 700 900 Actual overhead costs incurred during April amounted to P125,000. During April, jobs 1 and 3 were completed. Job 1 was delivered to a customer and an invoice for P800,000 was billed. Any over- or under-applied overhead is considered to be insignificant. How much is the cost of goods manufactured in April? How much is the adjusted gross profit in April?
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.
42
ABC Company uses a
The following information pertains to April 2022:
|
Job #1 |
Job #2 |
Job #3 |
Work in process, April 1 |
P320,000 |
P520,000 |
P760,000 |
|
|
|
|
April production: |
|
|
|
Direct materials requisitioned |
80,000 |
96,000 |
144,000 |
Direct labor costs |
48,000 |
72,000 |
90,000 |
Machine hours |
400 |
700 |
900 |
Actual overhead costs incurred during April amounted to P125,000. During April, jobs 1 and 3 were completed. Job 1 was delivered to a customer and an invoice for P800,000 was billed. Any over- or under-applied overhead is considered to be insignificant.
- How much is the cost of goods manufactured in April?
- How much is the adjusted gross profit in April?
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