Pogba Manufacturers produces a product in two phases details of the two processed for a period was as follows: Process 1: Raw material: Direct labour Production overheads Normal loss 10% of input Scrap value per unit: Process 2: Added materials: Direct labour: 6 000 kgs at $50 per kg $ 66 000 $ 56 100 $10 1500 kg at $40 per kg $ 49 000 $ 10 000 Production overheads: Normal loss: 15% of total input Scrap value per unit: Actual outputs for the two processes were as follows: Process 1: 5 500 kgs Process 2: 6 000 kgs REQUIRED: Prepare the process 1 & 2 accounts Prepare the Abnormal Loss & Abnormal Gain accounts $15
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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