J & G Manufacturing makes a single product by way of three separate processes. Details of production for the month ending June 30 were as follows: Process 1 Process 2 Process 3 Input material: 16,250 kg 390000 - - Material added - $36750 - Direct Labour cost $57300 $92200 $112800 Manufacturing Overhead $61000 $63000 $97080 Normal losses 8% 6% 6% Output 13750kg 12000kg Scrap value of losses - $16/kg $32/kg Required: i) The process account for each process: and ii) The abnormal loss/gain account(s) showing J & G Manufacturing true loss/gain.
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.
J & G Manufacturing makes a single product by way of three separate processes. Details of
production for the month ending June 30 were as follows:
Process 1 | Process 2 | Process 3 | |
Input material: 16,250 kg | 390000 | - | - |
Material added | - | $36750 | - |
Direct Labour cost | $57300 | $92200 | $112800 |
Manufacturing |
$61000 | $63000 | $97080 |
Normal losses | 8% | 6% | 6% |
Output | 13750kg | 12000kg | |
Scrap value of losses | - | $16/kg | $32/kg |
Required:
i) The process account for each process: and
ii) The abnormal loss/gain account(s) showing J & G Manufacturing true loss/gain.
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