Numbers 15, Pilipinas Shell Petroleum is employing normal costing for its job orders. The overhead is applied using a predetermined overhead rate. The following information relates to the Pilipinas Shell Petroleum for the year ended December 31,2016; Job No.101 Job No.102 Job No.103 Job in Process, January 1,2016; Direct Materials Labor Factory Overhead 160,000 240,000 120,000 120,000 160,000 80,000 Costs added during 2016 Materials 80,000 400,000 40,000 800,000 400,000 1,600,000 Labor Factory Overhead Additional information; 1. Actual overhead for the year 2016 amounted to P1,500,000. 2. Jobs No. 101 and 102 were completed and transferred to finished goods during year 2016. 4. The gross profit rate is 20% based on cost 15. What is the cost of goods manufactured for 2016? A. 2,320,000 B. 2,720,000 C. 2,800,000 D. 3,120,000
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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