Selected data concerning the past year’s operations of the Ozarks Manufacturing Company are as follows: Inventories Beginning Ending Raw material $ 51,000 $ 81,000 Work in process 80,000 30,000 Finished goods 90,000 110,000 Other data: Direct material used $ 318,000 Total manufacturing costs charged to production during the year (includes direct material, direct labor, and manufacturing overhead applied at a rate of 60% of direct-labor cost) 686,000 Cost of goods available for sale 826,000 Selling and administrative expenses 30,500 Required: 1. What was the cost of raw materials purchased during the year?
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 data concerning the past year’s operations of the Ozarks Manufacturing Company are as follows:
| Inventories | ||||||
| Beginning | Ending | |||||
| Raw material | $ | 51,000 | $ | 81,000 | ||
| Work in process | 80,000 | 30,000 | ||||
| Finished goods | 90,000 | 110,000 | ||||
Other data:
| Direct material used | $ | 318,000 | |
| Total during the year (includes direct material, direct labor, and manufacturing overhead applied at a rate of 60% of direct-labor cost) |
686,000 | ||
| Cost of goods available for sale | 826,000 | ||
| Selling and administrative expenses | 30,500 | ||
Required:
1. What was the cost of raw materials purchased during the year?
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