he following information has been taken from the job order cost system, used by SALEEM CORPORATION: Job No. Balance March 1 Production Cost in March 15 Rs. 150,000 --- 16 170,000 --- 17 50,000 Rs. 130,000 18 70,000 150,000 19 ---- 240,000 20 ---- 150,000 21 ---- 90,000 During March Job No. 17, 18 & 19 were completed, and job No. 15, 16 and 17 were sold on account at 40% above cost. REQUIRED: i) Cost of finished goods inventory – beginning ii) Cost of goods in process inventory – beginning iii) Cost of finished goods inventory – ending
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 following information has been taken from the
|
Job No. |
Balance March 1 |
Production Cost in March |
|
15 |
Rs. 150,000 |
--- |
|
16 |
170,000 |
--- |
|
17 |
50,000 |
Rs. 130,000 |
|
18 |
70,000 |
150,000 |
|
19 |
---- |
240,000 |
|
20 |
---- |
150,000 |
|
21 |
---- |
90,000 |
During March Job No. 17, 18 & 19 were completed, and job No. 15, 16 and 17 were sold on account at 40% above cost.
REQUIRED:
- i) Cost of finished goods inventory – beginning
- ii) Cost of goods in process inventory – beginning
iii) Cost of finished goods inventory – ending
- iv) Cost of goods in process inventory – ending
- v) Cost of goods
manufactured - vi) Cost of Goods sold
vii) Sales
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