Problem 2 The Antipolo company operates three departments. Product costs are tracked by department and assigned process costing system. Overhead is applied to production in each department at a rate of 80 percent of direct labor cost. The hereunder T-account information pertains to the department operations submitted by the cost accountant. Work in process - Stripping Dept. 1 20,000 Cost Transf. ? Work in process - Adhesion Dept. 2 Beg. Beg. 70,000 Cost Transf. 480,000 90,000 80,000 DM Trans. In ? DL DM 22,600 FO DL Ending 17,000 ? Ending FO 20,600 Work in Process - Packing Dept. 3 150,00 Transf. Fgoods ? Finished Goods 185,000 Cost of sales 770,000 Beg. Beg. CoGmf 880,000 DM DL Fo 90,000 Ending Ending 40,000
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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