Selected cost data concerning the past fiscal year’s operation of Malta Manufacturing Co. are presented below: Materials Work in process Finished goods Inventories Beginning Ending P75,000 P85,000 80,000 30,000 90,000 110,000 Materials used, P326,000. Total manufacturing costs charged to production during the period (including direct material, direct labor and factory overhead at a rate of 60% of direct labor cost), P686,000. Cost of goods available for sale , P826,000. Selling and general expenses, P25,000. Required: 7. What is the amount of direct materials purchased during the period? 8. What is the direct labor cost charged to production during the period? 9. What is the cost of goods manufactured during the year? 10. What is the cost of goods sold during the period?
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.
Selected cost data concerning the past fiscal year’s operation of Malta Manufacturing Co. are
presented below:
Materials
Work in process Finished goods
Inventories Beginning Ending
P75,000 P85,000 80,000 30,000 90,000 110,000
Materials used, P326,000. Total
Required:
7. What is the amount of direct materials purchased during the period?
8. What is the direct labor cost charged to production during the period?
9. What is the cost of goods manufactured during the year?
10. What is the cost of goods sold during the period?
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