At the beginning of the year, Wei Company had the following standard cost for one of its products: Direct Materials (0.4gr @$3) Direct Labor (0.02 hours @$15) Variable Overhead (0.25 hours @$20) Fixed Overhead (0.02 hours @$17) Total Standard Cost per Unit Fixed overhead rate is based on practical capacity of 180,000 units. For the year 2022, the company has produced 140,000 units with the following actual data: Direct Material purchased 30,000gr at total cost of $195,000 Ending Inventory of Direct Materials was 5,000gr Direct Labor used was 3,000 hours for $84,900 Variable Overhead costing $61,500 Fixed Overhead amounting $55,000 $1.2 $0.3 $5 $0.34 $6.84
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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