Prob 3. Mabini company uses a standard cost system for its machine paced production of telephone equipment. Data regarding production during June follow: Variable overhead costs incurred, P155,100 Variable overhead costs applied at P12 per machine hour Fixed overhead cost incurred, P401,000 Fixed overhead budgeted, P390,000 Denominator value in machine hours, 13,000 Standard machine hours allowed per equiv. unit of output, 0.3 Equiv. units of output, 41,000 Actual machine hours used, 13,300 Ending work in process inventory, zero
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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