COST OF GOODS MANUF OR LOSS The Parrish Fertilizer Company produces various types of fertilizer. No beginning units im process or finlshed units were on hand on January 1, 19X3; 30,000 finished units were om hand on December 31, 19X3, and 95,000 units were sold during the year. There were nc units in work-in-process inventory on December 31, 19X3. The materials put into produc tion cost $300,000; 75% were direct materials. There was no beginning or ending material inventory. Labor costs were $350,000; 40% was for indirect labor. Factory overhead costs other than indirect materials and indirect labor, were the following: Heat, light and power Depreciation... Property taxes Repairs and maintenance. $115,000 78,000 65,000 42,000 ....... ..... ..... Selling expenses were $80,000; general and administrative expenses were $50,000. Requlred: Compute the following: a Cost of goods manufactured b Total cost c Unit cost d Prime costs e Conversion costs f Period costs
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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