A Process has an opening work in process of 1200 units for the month costing RO.3600. (80% completion on material, 50% on labor and 100% on overheads) 3000 additional units introduced in the month and direct material, labor and overhead costs are Ro. 6000, Ro. 4000 and. Ro. 2000 respectively. At the end of the month, 3600 units were completed an transferred to next process and balance units are closing work in process. (50% completed for labor, 60% completed for material 20% completed for overhead.) There is no process loss in the account. You are required to prepare process account.
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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