ash Co makes AA and CC from a basic raw materials. For the year 2020, the all inclusive cost of the basic process amounted to P960 000 which was allocated on the basis of relative number of units produced. Additional data for the year 2020 are given below: AA CC Unit Produced 160000 80000 Unit selling price at split off P 5 7 unit selling price after additional process P 8 14 Additional Processing Cost P 640000 400000 Required The all-inclusive joint cost should be allocated to CC on what ratio (Convert to percentage and round off to two decimal places.) The all-inclusive joint cost should be allocated to AA on what ratio (Convert to percentage and round off to two decimal places.)
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.
Cash Co makes AA and CC from a basic raw materials. For the year 2020, the all inclusive cost of the basic process amounted to P960 000 which was allocated on the basis of relative number of units produced.
Additional data for the year 2020 are given below:
|
AA |
CC |
|||||
|
Unit Produced |
160000 |
80000 |
||||
|
Unit selling price at split off |
P |
5 |
7 |
|||
|
unit selling price after additional process |
P |
8 |
14 |
|||
|
Additional |
P |
640000 |
400000 |
Required
- The all-inclusive joint cost should be allocated to CC on what ratio (Convert to percentage and round off to two decimal places.)
- The all-inclusive joint cost should be allocated to AA on what ratio (Convert to percentage and round off to two decimal places.)
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