A manufacturing organisation operates on a job costing basis (i.e. only ONE Work in Process Account) and has the following information about its operations in one month: Raw Materials Account: Opening Balance: $5439 , Purchases $48543 and has a Closing Balance of $7477 WIP Account Information: Opening Balance WIP was $41851, DL $38164 and OHDs $21782 and the closing balance of WIP was $37663 Finished Goods Account Information: Opening Balance of FG was $71746 and the closing balance was $50675 Required: Calculate the Cost of Goods Sold 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 manufacturing organisation operates on a
Raw Materials Account:
Opening Balance: $5439 , Purchases $48543 and has a Closing Balance of $7477
WIP Account Information:
Opening Balance WIP was $41851, DL $38164 and OHDs $21782 and the closing balance of WIP was $37663
Finished Goods Account Information:
Opening Balance of FG was $71746 and the closing balance was $50675
Required: Calculate the Cost of Goods Sold this month
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