PREPARE AN INCOME STATEMENT MARIE SWIFT Company reported the given information for the month of October: Inventories: Raw materials P29,000 Work in process P19,000 Finished goods P55,000 Beginning Ending P36,000 P21,000 P53,000 Additional information: Raw materials purchases Direct labor cost P75,000 P45,000 Manufacturing overhead cost P64,000 P16,000 P44,000 P500,000 20,000 Selling expense Administrative expense Net Sales units produced Determine the values of the following: a. operating profit b. manufacturing cost c. cost of goods manufactured
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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