Jenny Company's Job No. 520 for the manufacture of 6,600 coats was completed December at the following unit costs: Direct materials - 1,500, Direct labor - 1,000, Factory overhead (including allowance of P50 for spoiled work) - 500. Total = 3,000. Final inspection of Job No. 520 disclosed 600 spoiled costs. These were subsequently sold to a jobber for 600,000. Assuming that spoilage loss is charged to all production, what would be the unit cost of the good coats produced per Job No. 520
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.
Jenny Company's Job No. 520 for the manufacture of 6,600 coats was completed December at the following unit costs: Direct materials - 1,500, Direct labor - 1,000, Factory overhead (including allowance of P50 for spoiled work) - 500. Total = 3,000. Final inspection of Job No. 520 disclosed 600 spoiled costs. These were subsequently sold to a jobber for 600,000. Assuming that spoilage loss is charged to all production, what would be the unit cost of the good coats produced per Job No. 520?
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