Problem 1. Colgate Palmolive Philippines employs a process cost system in the manufacture of toothpaste. Two departments are involved in the process: Department 1 and Department 2. No lost units are discovered in both departments. Below are the data n the Department 2 for the months of June and July: June 3,600 July In process at the beginning Materials Conversion costs 60% 33 1/3% Transferred in from Department 1 In process at the end Materials Conversion costs 9,000 2.400 7,500 2,700 33 1/3% 16 2/3% 50% 25% Costs of in process, beginning: Costs from Department 1 Materials Conversion costs Transferred in costs from Department 1 Materials costs added Conversion costs added P12,330 4,050 2,160 8,460 14,784 ? ? P9,675 11,730 3,384 2,592 REQUIRED: Prepare a cost of production report for the months of June and July using: (1) FIFO method and (2) WA method.
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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