A company had only one job in process on September 1. The job had been charged with $2,800 of direct materials, $6,900 $10,000 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $15.00 per direct labor-hour. During September, the following activity was recorded: Raw materials (all direct materials): Beginning balance Purchased during the month Used in production Labor: Direct labor-hours worked during the month Direct labor cost incurred Actual manufacturing overhead costs incurred Inventories: Raw materials, September 30 Work in process, September 30 $ 8,500 $38,000 $39,300 The cost of goods manufactured for September was: 1,900 $24,510 $33,300 ? $16,900 Work in process inventory on September 30 contains $4,000 of direct labor cost. Raw materials consist solely of items that are classified as direct materials.
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.
Cost of goods manufactured:
It is the cost incurred by the company in producing the goods. It includes the cost of raw materials, electricity, labor, etc. It includes fixed and variable costs.
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