Manufacturing Company produces special kitchen utensils using the JIT system. Transactions for the current period are as follow: a. Raw materials purchased, P1,950,000 b. Direct labor costs of P2,500,000 were incurred. c. Actual overhead costs of P3,500,000 were incurred. d. Conversion costs are directly charged to cost of sales. e. Finished goods, end amounted to P420,000 of which P200,000 is materials. f. Finished goods, beg amounted to P600,000 of which P350,000 is materials g. RIPI, beginning P850,000, of which materials is P600,000. h. RIPI, ending P750,000, of which materials is P500,000. The cost of sales for the period amounted to: a. P8,230,000
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.
a. Raw materials purchased, P1,950,000
b. Direct labor costs of P2,500,000 were incurred.
c. Actual
d. Conversion costs are directly charged to cost of sales.
e. Finished goods, end amounted to P420,000 of which P200,000 is materials.
f. Finished goods, beg amounted to P600,000 of which P350,000 is materials
g. RIPI, beginning P850,000, of which materials is P600,000.
h. RIPI, ending P750,000, of which materials is P500,000.
The cost of sales for the period amounted to:
a. P8,230,000
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