Problem 22: Cost of Goods Sold Statement Julius Inc. is employing normal costing for its job orders. The overhead is applied using a predetermined overhead rate. The following information relates to the Julius Inc. for the year ended December 31, 2020: Job No. 101 Job No. 102 Job No. 103 Job in Process, January 1, 2020: Direct Materials 40,000 30,000 0 Labor 60,000 40,000 0 Factory Overhead 30,000 20,000 0 Costs added during 2020 Materials 20,000 10,000 100,000 Labor 100,000 200,000 400,000 Factory overhead ? ? ? Additional Information: Actual overhead for the eyar 2020 amounted to P350,000. Jobs No. 101 and 102 were completed and transfered to finished goods during year 2020 Jobs No. 101 was sold during year 2020. The gross profit rate is 20% based on cost. Required: What is the tota manufacturing cost for 2020? What is the cost of goods manufactured for 2020? What is the cost of goods sold for 2020?
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.
Problem 22: Cost of Goods Sold Statement
Julius Inc. is employing normal costing for its job orders. The
Job No. 101 Job No. 102 Job No. 103
Job in Process, January 1, 2020:
Direct Materials 40,000 30,000 0
Labor 60,000 40,000 0
Factory Overhead 30,000 20,000 0
Costs added during 2020
Materials 20,000 10,000 100,000
Labor 100,000 200,000 400,000
Factory overhead ? ? ?
Additional Information:
- Actual overhead for the eyar 2020 amounted to P350,000.
- Jobs No. 101 and 102 were completed and transfered to finished goods during year 2020
- Jobs No. 101 was sold during year 2020.
- The gross profit rate is 20% based on cost.
Required:
- What is the tota
manufacturing cost for 2020? - What is the cost of goods manufactured for 2020?
- What is the cost of goods sold for 2020?
- What is the gross profit for 2020?
- What are the cost of work in process on December 31,2020?
- What is the cost of finished goods on December 31,2020?
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