On 31 December 2016 the following estimates relate to ABC Ltd for the year ending 30 June 2017. Estimated factory overheads $150000 Estimated raw-material cost $110000 Estimated direct labor cost $90000 Estimated direct labor hours 30000 hours Estimated machine hours 25000 hours Estimated units of output 5000 units The details for a job for 10 units on 12 January 2017 are given below: Estimated raw-material cost $240 Estimated direct labor cost $200 Estimated direct labor hours 63 hours Estimated machine hours 44 hours
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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