Forgiven and Free, Inc. is engaged in manufacturing of Product Save and employed and efficient cost accounting system. The company purchased direct materials, 30,000 pieces at P1.40 per piece. The inventories on June 1 Job No. Inventories Finished goods Amount P 12,000.00 1000 Work in Process 1,400.00 1001 Direct Materials 4,500.00 Additional costs incurred for the month are as follows. Manufacturing overhead costs are charged to the jobs on the basis of P35 per direct labor hour used. The actual manufacturing overhead cost for the month totaled P35,300. At the end of June, Job Order numbers 1003 and 1006 were still in process. Only Job Order numbers 1001 and 1005 were left unsold. Gross profit rate is 40% based on sales. Direct Direct Direct Labor Job No. Materials Labor Cost Hours 1001 4,100 P 3,000 50 1002 9,150 9,000 150 1003 11,150 21,000 350 1004 3,400 12,000 200 1005 6,450 15,000 250 1006 2,700 4,800 80
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.
The cost of goods manufactured is: (WITH SOLUTION)
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