During the month of March, 2018 the following costs were incurred in department No. 2 of Mian Paints Industry: Materials cost Rs.9,000, Labour cost Rs.4,250, F.O.H cost Rs : 5,100. During the month 20,000 units with a total cost of Rs.38,000 were transferred into department 2 from Department No, 1. Of these 15,000 units were completed and transferred to department No. 3 and 4,000 units were in process on 31 st March being 3/4 complete as to materials, 1/2 complete as to labour and factory overhead.
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 March, 2018 the following costs were incurred in department No. 2 of Mian
Paints Industry: Materials cost Rs.9,000, Labour cost Rs.4,250, F.O.H cost Rs : 5,100.
During the month 20,000 units with a total cost of Rs.38,000 were transferred into department 2 from
Department No, 1. Of these 15,000 units were completed and transferred to department No. 3 and
4,000 units were in process on 31 st March being 3/4 complete as to materials, 1/2 complete as to
labour and factory
Required: A cost of production report of department 2 for the month of March, 2018.
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