A Company manufactures two products: Shalom and Peace. During the year, it produced 80 Shalom and 60 Peace products and incurred estimated overhead costs of P350,000. An analysis of estimated overhead costs reveals the following activities: Cost Drivers Machine hours (MH) Number of inspections Orders Activities 1 Machining 2 Inspection 3 Packing Cost of direct materials Cost of direct labor Total Cost Shalom Format of percentages: 88% Words must be in capital letters. What is the total gross margin of the company? P120,000 1,200 MH 800 MH 80,000 100 inspections 500 inspections 150,000 700 orders P143,000 80,000 Amounts must be in whole numbers. Example: 88,000 or (88,000) Unit costs be in whole numbers. Example: 88 Peace 800 orders P188,000 110,000 The company sold 40 units of Shalom at P8,000 per unit. While for Peace, 20 units were sold at P7,500.
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.
Step by step
Solved in 3 steps with 4 images