ntegrity Manufacturing Company is in its first month of operation. The costs of the joint process were direct materials, 30,000; direct labor, 12,000; and overhead, 8,380. Products X, Y, and Z are the main products. B is a by-product. The company’s policy is to recognize the net realizable value of any by-product inventory at split-off and reduce total joint cost by that amount. Neither the main products nor the by-product requires any additional processing or disposal costs, although management may consider additional processing. Weight in lbs MV at SPO point Units produced Units sold X 4,300 66,000 3,220 2,720 Y 6,700 43,000 8,370 7,070 Z 5,400 11,200 4,320 3,800 B 2,300 2,300 4,600 4,000 Assuming that joint cost allocation is based on relative sales value, the value of the ending inventory of Product X is A. 4,295 B. 4,037 C. 4,099 D. 4,114
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.
Integrity Manufacturing Company is in its first month of operation. The costs of the joint process were direct materials, 30,000; direct labor, 12,000; and overhead, 8,380. Products X, Y, and Z are the main products. B is a by-product. The company’s policy is to recognize the net realizable value of any by-product inventory at split-off and reduce total joint cost by that amount. Neither the main products nor the by-product requires any additional processing or disposal costs, although management may consider additional processing.
Weight in lbs MV at SPO point Units produced Units sold
X 4,300 66,000 3,220 2,720
Y 6,700 43,000 8,370 7,070
Z 5,400 11,200 4,320 3,800
B 2,300 2,300 4,600 4,000
Assuming that joint cost allocation is based on relative sales value, the value of the ending inventory of Product X is
A. 4,295
B. 4,037
C. 4,099
D. 4,114
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