Landa company uses a step down allocation costing method to determine the cost of its products. The company uses the costing method of the first issued from the first import. Product inspection is performed on 60% of completed products and normal waste is 5% of inspected healthy units. Direct materials are put into operation immediately after product inspection: The following information is related to October: Goods completed during the first manufacture of 10,000 units . 25. Units started to produce 75,000 units. Supplementary and transfer units to the warehouse 60,000 units. Units under construction at the end of the period 20,000 units % 75 completed. Labor costs during the construction of the first course. The total cost of labor during the first construction period is 4664,000 Rials. Expenses incurred during the course: Direct materials 80,000,000 Rials. Direct salary 80,000,000 Rials. Factory overhead 400,000,000 Rials. It is desirable to prepare a production cost report.
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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