On September 30, 20x1, the warehouse of A Company for inventory in progress and all inventories contained therein were razed by fire. Amounts for the following accounts have been established: Jan 01 - Accounts payable 125,000.00 - Raw materials 23,000.00 - Work in process 63,000.00 - Finished goods 55,500.00 September 30 - Accounts payable 146,500.00 - Raw materials 28,000.00 - Work in process ? - Finished goods 61,000.00 The following additional information was determined: - Payments for purchases on account - 100,000.00 - Freight on purchases - 12,000.00 - Purchase returns 15,000.00 - Direct labor 42,000.00 - Manufacturing overhead 21,000.00 - Sales from January to June 29 290,000.00 - Sales returns 15,000.00 - Sales discounts 29,000.00 - Gross profit rate based on sales 40% Determine the loss on fire assuming P4,000 worth of scrap are recovered but realized for P3,000.
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.
On September 30, 20x1, the warehouse of A Company for inventory in progress and all inventories contained therein were razed by fire. Amounts for the following accounts have been established:
Jan 01
- Accounts payable 125,000.00
- Raw materials 23,000.00
- Work in process 63,000.00
- Finished goods 55,500.00
September 30
- Accounts payable 146,500.00
- Raw materials 28,000.00
- Work in process ?
- Finished goods 61,000.00
The following additional information was determined:
- Payments for purchases on account - 100,000.00
- Freight on purchases - 12,000.00
- Purchase returns 15,000.00
- Direct labor 42,000.00
- Manufacturing
- Sales from January to June 29 290,000.00
- Sales returns 15,000.00
- Sales discounts 29,000.00
- Gross profit rate based on sales 40%
Determine the loss on fire assuming P4,000 worth of scrap are recovered but realized for P3,000.
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