Mohini shoes Co. manufactures two types of shoes A and B. Production costs for the year ended March 31st, 2015 were: Particulars Rs Direct materials 15,00,000 Direct wages 8,40,000 Production overheads 3,60,000 Total 27,00,000 There was no work in progress at the beginning or at the end of the year. It is ascertained that (a) Direct material in type A shoes consist twice as much as that in type B shoes. (b) The direct wages for type B shoes were 60% of those of type A shoes. (c) Production overhead was the same per pair of A and B type (d)Administrative overhead for each type was 150% of direct wages. (e) Selling expenses was Rs.1.50 per pair. (f) Production during the year were. Type A :-40,000 pairs of which 36,000 were sold. Type B :– 1,20,000 pairs of which 1,00,000 were sold. (g) Selling price was Rs.44 for Type A and Rs.28 for Type B. Prepare statement showing cost and profit.
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.
Mohini shoes Co. manufactures two types of shoes A and B. Production costs for the year ended March 31st, 2015 were:
| Particulars | Rs |
| Direct materials | 15,00,000 |
| Direct wages | 8,40,000 |
| Production |
3,60,000 |
| Total | 27,00,000 |
There was no work in progress at the beginning or at the end of the year. It is ascertained that
(a) Direct material in type A shoes consist twice as much as that in
type B shoes.
(b) The direct wages for type B shoes were 60% of those of type
A shoes.
(c) Production overhead was the same per pair of A and B type
(d)Administrative overhead for each type was 150% of direct wages.
(e) Selling expenses was Rs.1.50 per pair.
(f) Production during the year were.
Type A :-40,000 pairs of which 36,000 were sold.
Type B :– 1,20,000 pairs of which 1,00,000 were sold.
(g) Selling price was Rs.44 for Type A and Rs.28 for Type B.
Prepare statement showing cost and profit.
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