Diskit Shi is reviewing the cost structure of different products. The following information relate a product. Direct Materials Inventory, beginning of the year $5,500 Direct Materials Inventory, end of the year 3,000 Direct Materials purchased during the year 45,000 Work in Process Inventory, beginning of the year 9,000 Manufacturing overhead applied during the year 20,000 Work in Process Inventory, end of the year 14,000 Predetermined overhead rate—200% of direct labour cost Calculate the amount of direct labour cost incurred during the year.
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.
Diskit Shi is reviewing the cost structure of different products. The following information relate a product.
| Direct Materials Inventory, beginning of the year | $5,500 |
| Direct Materials Inventory, end of the year | 3,000 |
| Direct Materials purchased during the year | 45,000 |
| Work in Process Inventory, beginning of the year | 9,000 |
| Manufacturing |
20,000 |
| Work in Process Inventory, end of the year | 14,000 |
Predetermined overhead rate—200% of direct labour cost
Calculate the amount of direct labour cost incurred during the year.
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