BBD Production Company’s Mixing department shows the following information for the input of 1,800 units. 600 of input remaining in work in process and the rest have been transferred as finished goods at the end of the period. Assume there was no beginning inventory and no wastage. Total Input 1800 Units Finished Goods: 1200 Units WIP: 600 Units Off the WIP Direct materials 5 per cent incomplete Direct labour 63 per cent incomplete Overhead 41 per cent incomplete
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.
- BBD Production Company’s Mixing department shows the following information for the input of 1,800 units. 600 of input remaining in work in process and the rest have been transferred as finished goods at the end of the period. Assume there was no beginning inventory and no wastage.
|
Total Input |
1800 Units |
Finished Goods: 1200 Units |
WIP: 600 Units |
|
Off the WIP |
|||
|
Direct materials |
5 |
per cent incomplete |
|
|
Direct labour |
63 |
per cent incomplete |
|
|
|
41 |
per cent incomplete |
|
|
Cost of Input |
|
|
Direct materials |
£10,000 |
|
Direct labour |
£5,000 |
|
Overhead |
£11,000 |
A). What is the total cost of the finished goods?
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