ABC Company’s Job 123 for the manufacture of 2,000 bags was completed during June 2022 at the following unit costs: · Direct Materials, P20 · Direct Labor, P18 · Overhead (including allowance of P1 for spoiled work), P18 Final inspection of Job 123 disclosed 100 spoiled bags which were sold to an online store for P1,985. Determine the total cost of completed units.
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.
ABC Company’s Job 123 for the manufacture of 2,000 bags was completed during June 2022 at the following unit costs:
· Direct Materials, P20
· Direct Labor, P18
· Overhead (including allowance of P1 for spoiled work), P18
Final inspection of Job 123 disclosed 100 spoiled bags which were sold to an online store for P1,985.
Determine the total cost of completed units.
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