During the month of January 2020,Direct material worth 300,000 dollars were issued to produce 26,000 units of finished goods. Direct labor to process these material totaled 110,000 dollar and FOH is 55,000 dollars. During the month processing of 20,000 units were completed and these units were transferred to next department, whereas 1000 units were lost during processing. The loss is regarded as normal loss. All of these direct material has been issued for the units in process at the end of month ,but these units were only 40 percent converted. You are required to make a A cost of production Report for the month based on the above information .
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.
During the month of January 2020,Direct material worth 300,000 dollars were issued to produce 26,000 units of finished goods. Direct labor to process these material totaled 110,000 dollar and FOH is 55,000 dollars. During the month processing of 20,000 units were completed and these units were transferred to next department, whereas 1000 units were lost during processing. The loss is regarded as normal loss. All of these direct material has been issued for the units in process at the end of month ,but these units were only 40 percent converted. You are required to make a A cost of production Report for the month based on the above information .
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