Materials purchased Cost of direct materials used in production Direct labor Factory overhead Total manufacturing costs incurred in December Total manufacturing costs Work in process inventory, December 1 Work in process inventory, December 31 Cost of goods manufactured Finished goods inventory, December 1 Finished goods inventory, December 31 Sales 99,20 164,080 173,130 243,540 197,690 75,580 98,400 (b) 568,450 616,280 616,280 124,030 211,740 104,650 (c) (c) 563,180 109,170 98,400 114,340 (d) 952,200 878,600 (₂) (a) (b) 150
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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The cost of goods manufactured includes the cost of goods that are finished during the period. The gross profit is calculated as the difference between sales and cost of goods sold.
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