From the following data, prepare process accounts indicating the cost of each process and the total
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.
From the following data, prepare process accounts indicating the cost of each process and the total cost.
Process A Process B
Materials RO 3,500 RO 2,500
Labor RO 1,800 RO 2,400
Other expenses RO 2,520 RO 7,008
Input introduced 400 units
Output c/f to Next Process 350 units 220 units
Normal Loss of input 20% 30%
Indirect expenses amounting to RO 5,000 are to be apportioned based on labor. There was no opening or closing stock. Calculate number of units of abnormal loss/gain and value of abnormal loss/gain for Process B.
Abnormal gain 25 units and Abnormal gain value RO 2,619
Abnormal loss 30 units and Abnormal loss value RO 943
Abnormal gain 30 units and Abnormal gain value RO 934
Abnormal loss 25 units and Abnormal loss value RO 2,619
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