Goroka Factory provided the following information for the last calendar year, Beginning Inventory Director Materials K50,800 Work in Process K58,000 Ending Inventories Direct materials K21,000 Work in Process K23,500 During the year, Direct materials purchased amounted to K150,000, direct labour cost was K200,000 and overhead cost was K324,700. There were 100,000 units produced. Required: 1. Calculate the total cost of direct materials used in production? 2. Calculate the cost of goods manufactured? 3. Calculate the unit manufactured cost?
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.
Goroka Factory provided the following information for the last calendar year,
Beginning Inventory
Director Materials K50,800
Work in Process K58,000
Ending Inventories
Direct materials K21,000
Work in Process K23,500
During the year, Direct materials purchased amounted to K150,000, direct labour cost was K200,000 and overhead cost was K324,700. There were 100,000 units produced.
Required:
1. Calculate the total cost of direct materials used in production?
2. Calculate the cost of goods manufactured?
3. Calculate the unit manufactured cost?
4. Of the unit
5. What is the conversion cost per unit, using the information on question 4?
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