8- Suppose that a cement factory has a normal production capacity of 80.000 tons. In March, 20.000 tons were produced and 15.000 tons were sold. Here are the data: (a) Direct material cost 200.000 TL, (b) Direct labor cost 800.000 TL, (c) Factory overhead 1.000.000 TL. As an internal auditor, you have explored that 100% of the direct labor costs and 80% of the factory overhead is fixed. Now, what would be the cost of cement sold when normal absorption costing is used? 450.000 TL O 500.000 TL 550.000 TL 600.000 TL
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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