A manufacturer operates on a job costing basis (i.e. only ONE Work in Process - WIP - Account and all costs are traceable) The company has recorded the following for a single month of production: Raw Materials - Opening Balance: $14072 , Purchases $76037 and has a Closing Balance of $17977 WIP Information: Conversion costs incurred this period include: Opening balance of WIP was $54540, DL $39742 and OHDs $40023 and the closing balance of WIP was $26620 Finished Goods information: Opening Balance of FG was $55460 and the closing balance was $60914 Required: Trace all costs through to calculate the Cost of Goods Manufactured this month
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.
A manufacturer operates on a
The company has recorded the following for a single month of production:
Raw Materials - Opening Balance: $14072 , Purchases $76037 and has a Closing Balance of $17977
WIP Information: Conversion costs incurred this period include: Opening balance of WIP was $54540, DL $39742 and OHDs $40023 and the closing balance of WIP was $26620
Finished Goods information: Opening Balance of FG was $55460 and the closing balance was $60914
Required: Trace all costs through to calculate the Cost of Goods Manufactured this month
Step by step
Solved in 2 steps with 1 images
