Original cost accumulation: Direct materials P13,200 Direct labor 16,000 Factory overhead (150% of direct labor) 24,000 Direct costs of reworked 10 units Direct materials 2,000 Direct labor 3,200 The total rework costs were attributable to exacting specifications of Job 75 and the full rework costs were charged to the specific job. The cost per unit of Job 75 was
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.
Original cost accumulation:
Direct materials P13,200
Direct labor 16,000
Factory
Direct costs of reworked 10 units
Direct materials 2,000
Direct labor 3,200
The total rework costs were attributable to exacting specifications of Job 75 and the full rework costs were charged to the specific job.
- The cost per unit of Job 75 was
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