Problem 3. The Noka Construction Co. started work on three job sites during the current year. Data relating to the three jobs are given below: Cost Incurred Est. Cost to Complete Billing on Contract 375,000 Site Contract Price Collection contract Cavite 500, 000 P500, 000 400, 000 400, 000 100, 000 Rizal 100, 000 100, 000 700, 000 100, 000 50, 000 Bulacan 250, 000 What would be the amount of cost of constructions to be reported on the year-end balance sheet if the percentage of completion method is used?
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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