Integrity CORP uses job order costing. At Jan 31, only Job 101 was the only job in process with accumulated cost of P9,000 (Direct materials is P4,000 and applied overhead of P3,000). Factory overhead is applied based on direct labor cost. At Jan 1, only Job 100 is still in process with total cost of P5,000. During January, Job 101, Job 102, Job 103, Job 104, Job 105, Job 106, Job 107 and Job 108 were put into process by the company. Total Raw materials purchased is P 120,000. Raw materials increased by P9,000. Total direct labor cost, net of withholding tax of P10,000, was P 100,000. Actual overhead incurred includes indirect materials of P5,000, indirect labor of P5,000 and other overhead cost amounted to P 153,000. If finished goods inventory decreased by P20,000 and any under-over applied overhead is immaterial, what is the adjusted cost of goods sold?
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.
If finished goods inventory decreased by P20,000 and any under-over applied overhead is immaterial, what is the adjusted cost of goods sold?
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