Aikman Corporation has the following cost records for June 2020: Direct materials (6/1/20) $ 10,000 Direct materials (6/30/20) 5,000 Direct materials Purchases 20,000 Direct labour 30,000 Indirect factory labour 4,500 Factory utilities $ 400 Depreciation, factory equipment 1,400 Maintenance, factory equipment 1,800 Indirect materials 2,200 Factory manager’s salary 3,000 Work in process (6/1/20) 3,000 Work in process (6/30/20) 2,800 Finished goods (6/1/20) 5,000 Finished goods (6/30/20) 9,500 Marketing Costs 11,000 General and Administrative Costs 6,000 Prepare a cost of goods manufactured schedule for June 2020. Prepare an income statement through operating profit for June 2020, assuming net sales are $120,000.
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.
QUESTION.
- Aikman Corporation has the following cost records for June 2020:
|
Direct materials (6/1/20) |
$ 10,000 |
|
Direct materials (6/30/20) |
5,000 |
|
Direct materials Purchases |
20,000 |
|
Direct labour |
30,000 |
|
Indirect factory labour |
4,500 |
|
Factory utilities |
$ 400 |
|
|
1,400 |
|
Maintenance, factory equipment |
1,800 |
|
Indirect materials |
2,200 |
|
Factory manager’s salary |
3,000 |
|
Work in process (6/1/20) |
3,000 |
|
Work in process (6/30/20) |
2,800 |
|
Finished goods (6/1/20) |
5,000 |
|
Finished goods (6/30/20) |
9,500 |
|
Marketing Costs |
11,000 |
|
General and Administrative Costs |
6,000 |
- Prepare a cost of goods manufactured schedule for June 2020.
- Prepare an income statement through operating profit for June 2020, assuming net sales are $120,000.
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