For the month of January 2022, AU Company reported the following production data for Finishing Department. The company is in the first year of operation and uses WAM. Transferred in 75,000 Transferred out to Finished Goods 59,250 In process, end (1/3 converted) 15,750 All raw materials are added in the 1st Department while packaging materials are added at the end of the process in this department. Cost data for the Finishing Department this period are as follows: Transferred in unit cost P12.70 Direct materials unit costs per EUP P8.50 Labor costs, this department P41,280 Applied overhead, 120% of labor costs The total costs to account in the Finishing Department amounted to:
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.
For the month of January 2022, AU Company reported the following production data for Finishing Department. The company is in the first year of operation and uses WAM.
Transferred in 75,000
Transferred out to Finished Goods 59,250
In process, end (1/3 converted) 15,750
All raw materials are added in the 1st Department while packaging materials are added at the end of the process in this department. Cost data for the Finishing Department this period are as follows:
Transferred in unit cost P12.70
Direct materials unit costs per EUP P8.50
Labor costs, this department P41,280
Applied
The total costs to account in the Finishing Department amounted to:
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