Orange Electronics (OE) produced 30,000 widgets last month. OE started the month with $50,000 worth of inventory in their Finished Goods. The company incurred $70,000 of various utility and rent charges on their factory, paid $200,000 for raw materials to use in production, and paid employees $50,000 in wages. During the month, inventory costing $300,000 was completed and transferred to the Finished Goods Inventory. At the end of the month, OE had $20,000 of Inventory in Finished Goods, $10,000 in Materials Inventory, and $15,000 still in Work in Process. What was OE’s Cost of Goods Manufactured for the month?
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.
Orange Electronics (OE) produced 30,000 widgets last month. OE started the month with $50,000 worth of inventory in their Finished Goods. The company incurred $70,000 of various utility and rent charges on their factory, paid $200,000 for raw materials to use in production, and paid employees $50,000 in wages.
During the month, inventory costing $300,000 was completed and transferred to the Finished Goods Inventory. At the end of the month, OE had $20,000 of Inventory in Finished Goods, $10,000 in Materials Inventory, and $15,000 still in Work in Process.
What was OE’s Cost of Goods Manufactured for the month?
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