Garane Steel produces large sheets of heavy gauge steel. The company showed the following amounts relating to its production for the month just completed: R Direct materials used in production 110 000 Direct labour costs for the month 55 000 Work in process: beginning 22 000 Finished goods: beginning 45 000 Cost of goods available for sale 288 000 Cost of goods sold 238 000 Work in process: ending 16 000 Manufacturing overhead cost for the month was: A. R78 000 B. R72 000 C. R84 000 D. R56 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.
Garane Steel produces large sheets of heavy gauge steel.
The company showed the following amounts relating to its production for the month just completed:
|
|
R |
|
Direct materials used in production |
110 000 |
|
Direct labour costs for the month |
55 000 |
|
Work in process: beginning |
22 000 |
|
Finished goods: beginning |
45 000 |
|
Cost of goods available for sale |
288 000 |
|
Cost of goods sold |
238 000 |
|
Work in process: ending |
16 000 |
| A. |
R78 000 |
|
| B. |
R72 000 |
|
| C. |
R84 000 |
|
| D. |
R56 000 |
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