Prepare a cost sheet of the following data relating to the manufacture of Jeans:
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.
Prepare a cost sheet of the following data relating to the manufacture of Jeans:
Number of Jeans manufactured during the month
1.000
Direct materials consumed
Rs. 20,000
Direct labour.
8,000
Indirect labour (in factory)
2.500
Supervision costs in factory)
Rs. 1,000
Factory premises rent
Rs. 1.600
Factory lighting
Rs. 600
Oil for machines
Rs. 100
Rs. 500
Office
Rs. 8,000
Office salaries
Rs. 2,000
Mise, office expenses
Rs. 1,000
Selling and distribution overheads
Rs. 6.000
Note: A profit margin of 20% on the total cost of goods is expected on the sale of jeans.
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