Data are as follows: Beginning balance of RM is 12,000; Purchases of materials totaled 400,000; Raw materials account balance increased to 20,000; Total Payroll of the company is 300,000 (80% was attributable to Production/Factory and remaining was part of Gen Admin expenses). Indirect material is 10,000 and indirect labor cost is 5,000. OH rate is 200% of Direct labor cost. Actual OH is 500,000. WIP increased by 22,000 and FG inventory decreased by 30,000. What is the cost of sales at normal cost? Assume that under or overapplied overhead is immaterial.
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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