P26.2 (LO 2, 3, 4), AP Ayala Corporation accumulates the following data relative to jobs started and finished during the month of June 2022. Costs and Production Data Raw materials unit cost Raw materials units Direct labor payroll Direct labor hours Actual $2.25 10,600 $120,960 14,400 $189,500 Standard $2.10 10,000 $120,000 15,000 Manufacturing overhead incurred Manufacturing overhead applied Machine hours expected to be used at normal capacity Budgeted fixed overhead for June Variable overhead rate per machine hour Fixed overhead rate per machine hour Overhead is applied on the basis of standard machine hours. Three hours of machine time are required $193,500 42,500 $55,250 $3.00 $1.30
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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