For the year ended December 31, 2020, the job cost sheets of Beverly Hills Company contained the following data: Job No. 7640 Job No. 7641 Job No. 7642 Direct Materials: Balance, Jan 1 Current year Direct Labor Balance, Jan 1 Current year FOH Applied: Balance, Jan 1 Current Year P25,000 30,000 P11,000 43,000 P58,000 24,000 36,000 18,000 48,000 55,000 28,800 43,200 21,600 57,600 66,000 Other data: 1. Materials inventory totaled P15,000 on January 1. During the year, P140,000 of raw materials were purchased on account. 2. Finished goods on January 1 consisted of Job No. 7638 for P87,000 and Job No. 7639 for P92,000. 3. Job No. 7640 and Job No. 7641 were completed during the year. 4. Job Nos. 7638, 7639, and 7641 were sold on account for P530,000. 5. Manufacturing overhead incurred on account totaled P120,000. 6. Other manufacturing overhead consisted to indirect materials of P14,000, indirect labor P18,000 and depreciation on factory machinery P8,000. The materiality threshold for factory overhead is P5,000.
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.
| 1. Calculate for the inventory of materials, December 31. |
| 2. Calculate for the total or over-all |
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3. Calculate for the cost of goods manufactured.
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| 4. Calculate for the total cost of goods sold. |
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5. Calculate for the work in process inventory, December 31.
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| 6. Calculate for the finished goods inventory, December 31. |
| 7. Calculate for the gross |
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