No Sugar Corporation began its operations on January 1, 2007 and produces a single product that sells for Php28 per unit. Standard capacity is 100,000 units per year. During the year, 100,000 units were produced and 75,000 units were sold. Manufacturing costs & selling and administrative expenses were as follows: Direct materials ₱3.00 per unit produced Direct labor 2.00 pee unit produced Factory Overhead ₱300,000 + 1.00 per produced Selling and Administrative Expenses ₱160,000 + 1.00 per unit sold Instructions: 1. Determine the total cost of ending inventory under variable costing and absorption costing. 2. Determine the total cost of sales under variable costing and absorption costing. 3. Determine the net income under the variable costing and absorption costing.
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.
No Sugar Corporation began its operations on January 1, 2007 and produces a single product that sells for Php28 per unit. Standard capacity is 100,000 units per year. During the year, 100,000 units were produced and 75,000 units were sold.
| Direct materials |
₱3.00 per unit produced
|
|||
| Direct labor |
2.00 pee unit produced
|
|||
|
Factory
|
₱300,000 + 1.00 per produced
|
|||
|
Selling and Administrative Expenses
|
₱160,000 + 1.00 per unit sold
|
Instructions:
1. Determine the total cost of ending inventory under variable costing and absorption costing.
2. Determine the total cost of sales under variable costing and absorption costing.
3. Determine the net income under the variable costing and absorption costing.
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