Southern Aggregate Company manufactures concrete by a series of four processes. All materials are introduced in Crushing. From Crushing, the materials pass through Sifting, Baking, and Mixing, emerging as finished concrete. All inventories are costed by the first in, first-out method. The balances in the accounts Work in Process-Mixing and Finished Goods were as follows on May 1, 2016: Inventory in Process-Mixing (2,000 units, 1/4 completed) P13,700 Finished Goods (1,800 units at P8.00 a unit) 14,400 The following costs were charged to Work in Process-Mixing during May: Direct materials transferred from Baking: 15,200 units at P98,800 17,200 11,780 P6.50 a unit . Direct labor . Factory overhead.. During May, 16,000 units of concrete were completed, and 15,800 units were sold. Inventories on May 31 were as follows: Inventory in Process-Mixing: 1,200 units, 1/2 completed Finished Goods: 2,000 units Required: 1. Prepare a cost of production report for the Mixing Department. 2. Determine the cost of goods sold (indicate number of units and unit costs). 3. Determine the finished goods inventory, May 31, 2016.
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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