Harith Company's industrial photo-finishing division, Rho, incurred the following cost and expenses in 2021: Direct Materials Direct Labor Factory Overhead General, selling and administrative Totals VARIABLE P200,000 150,000 70,000 30,000 P450,000 FIXED P42,000 48,000 P90,000 During 2021, Rho produced 300,000 units of industrial photo-prints, which were sold for P2.00 each. Oslo's investment in Rho was P500,000 and P700,000 at January 1 and December 31, 2021 respectively. Harith normally imputes interest on investment at 15% of average invested capital. Assume that net operating profit was P60,000 and that average invested capital was P600,000. For the year ended, Rho's residual income(loss) was -45,000 150,000 60,000 -30,000
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.
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