Mark Inc. is engaged in the business of manufacturing basket balls. the company employs actual costing system. the company uses a single account for direct and indirect materials. the company provided the following data for the year ended December 31, 2016: gross sales 9,500,000 sales returns 500,000 gross purchases 1.000.000 purchases, returns and allowance and discount 200,000 freight in 400,000 total costs of factory labor 1,000,000 depreciation of factory assets 300,000 expired insurance on factory assets 100,000 utilities expense on factory 500,000 total administrative expenses 2,000,000 total marketing expenses 3,000,000 inventories are as follows: January 1 December 31 raw materials 100,000 300,000 work in process ? 200,000 finished goods 500,000 600,000 the following additional data are provided: 1. the net profit of the company befoere income tax for the year ended December 31, 2016 was 10% of net sales. 2. the direct labor cost for the year was four times the cost of in direct labor. 3. the cost of indirect materials cost used was 100,000 required: compute the following a. prime cost b. convertion cost c. cost of goods manufactured
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.
Mark Inc. is engaged in the business of manufacturing basket balls. the company employs actual costing system. the company uses a single account for direct and indirect materials. the company provided the following data for the year ended December 31, 2016:
gross sales 9,500,000
sales returns 500,000
gross purchases 1.000.000
purchases, returns and allowance and discount 200,000
freight in 400,000
total costs of factory labor 1,000,000
expired insurance on factory assets 100,000
utilities expense on factory 500,000
total administrative expenses 2,000,000
total marketing expenses 3,000,000
inventories are as follows:
January 1 December 31
raw materials 100,000 300,000
work in process ? 200,000
finished goods 500,000 600,000
the following additional data are provided:
1. the net profit of the company befoere income tax for the year ended December 31, 2016 was 10% of net sales.
2. the direct labor cost for the year was four times the cost of in direct labor.
3. the cost of indirect materials cost used was 100,000
required: compute the following
a. prime cost
b. convertion cost
c. cost of goods
d. cost of goods sold
work in process Jan. 1, 2016
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