EXERCISE 2 Fill in the missing information on the cost of goods manufactured schedule of Noland Manufacturing Company: Work in process (1/1) Direct materials Raw materials inventory (1/1) Raw materials purchases Raw materials available for use Raw materials inventory (12/31) Direct materials used Direct labor Manufacturing overhead Indirect labor Factory depreciation Factory utilities NOLAND MANUFACTURING COMPANY Cost of Goods Manufactured Schedule For the Year Ended December 31, 2012 Total overhead Total manufacturing costs Total cost of work in process Less: Work in process (12/31) Cost of goods manufactured 246,000 37,000 19,000 38,000 39,000 $255,000 $320,000 322,000 $440,000
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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