AAV Company's Job 168 for the manufacture of 2,500 coats in August was completed with a cost per unit of P120 net of allowance for spoilage of P5. The direct labor rate for the job amounted to P20 per direct labor hour. The total cost of direct materials used for Job 168 amounted to P150,000. The records revealed that one-half hour is needed in producing a unit of product. Final inspection of Job 168 revealed that 300 coats are spoiled and these are sold for P20,000. 1. If the spoilage is charged to specific job, what is the cost per unit of Job 168?
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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