Pretty La Fea Company reported the following for the year just ended: Beginning Inventories: Raw Materials P450,000 Work in Process 560,000 Finished Goods Ending Inventories: 900,000 Raw Materials P600,000 Work in Process 760,000 Finished Goods 1,040,000 Goods Manufactured P6,800,000 Raw Material purchases 2,650,000 Overhead applied 50% of DLC a. how to solve for the indirect material b. how to solve for the Direct Labor Cost How much is the Total Cost of Goods Put into Process?
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.
. Pretty La Fea Company reported the following for the year just ended:
|
Beginning Inventories: |
|
|
|
|
Raw Materials |
|
|
P450,000 |
|
Work in Process |
|
|
560,000 |
|
Finished Goods
Ending Inventories: |
|
|
900,000 |
|
Raw Materials |
|
|
P600,000 |
|
Work in Process |
|
|
760,000 |
|
Finished Goods
|
|
|
1,040,000 |
|
Goods Manufactured |
|
|
P6,800,000 |
|
Raw Material purchases |
|
|
2,650,000 |
|
Overhead applied |
|
|
50% of DLC |
a. how to solve for the indirect material
b. how to solve for the Direct Labor Cost
- How much is the Total Cost of Goods Put into Process?
- Compute for the Prime Cost of the company.
- How much is the Cost of Goods Sold?
- Assuming a 45% Gross Profit Rate and the company sold half of the products, how much is the expected amount to be received by the company?
- If the company incurs P30,000 distribution costs, P45,000 office employee’s wages, compute for the company’s net income.
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