Solve the following mention questions: 1) A product passes through three processes. The output of each process is treated as the raw material of the next process to which it is transferred and output of the third process is transferred to finished stock. Materials issued Labour Manufacturing overhead Process Process-l Process-11 Process-1 ($) Process-III 40,000 6,000 10,000 Output 9,750 units 9,400 units Process-II ($) 10,000 units have been issued to the Process-I and after processing, the output of each process is as under: 8,000 units 20,000 4,000 10,000 Normal Loss 2% 5% Process-III ($) 10% 10,000 1,000 15,000 No stock of materials or of work-in-process was left at the end. CALCULATE the cost of the finished articles.
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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