PT ABC has two production departments, namely departments A and B to produce its products. The production and cost data for the two departments in June 2022 are as follows: Department A Department B Production Data Products In Process BB 100% Conversion 40% BB 100% Conversion 20% 6,000 kg Unit goes into process Transferred to the Department B Units received from 35,000 kg Department A Finished goods transferred to 44,000 kg warehouse 5,000 Kg Addition of units in the department B Products in Final Process 9,000 kg BB 100% Conversion 60% BB 100% Conversion 30% Basic Price of Goods in 2,000 kg initial process Cost of goods IDR. 60,000,000 Department A Raw Material Cost IDR. 18,000,000 IDR. 21,000,000 IDR. 9,840,000 Labor costs IDR. 15,420,000 Factory Overhead Cost IDR. 16,500,000 IDR. 6,900,000 Total IDR. 47,340,000 IDR. 100,320,000 Production Costs during the period Raw Material Cost IDR. 210,000,000 IDR. 120,000,000 IDR. 105,000,000 Labor costs IDR. 75,000,000 IDR. 135,000,000 Factory Overhead Cost Total IDR. 60,000,000 IDR. 285,000,000 IDR. 420,000,000 Required: Prepare a Production Cost Report for departments A and B using the FIFO method from 4,000 kg 40,000 kg 35,000 kg
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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