Summit Incorporated produced by the end of the first month May 31, 202x - 40,000 units of its single product. The product requires three basic raw materials A, B and C which were purchased during the month as follows: Materials A B с Purchase Price Other costs consisted of: Factory wages and other salaries paid were: Direct labor Indirect labor P 0.25 0.20 0.50 Supplies Repairs and Maintenance Depreciation Utilities Insurance Delivery Expense Supervision Marketing and administrative salaries Quantities Purchased Factory Overhead P 1,400 900 800 1,740 560 0 35,000 10,000 8,000 P 18,750 2,800 3,000 12,400 Quantities on Hand, May 31 4,000 6,000 5,000 Marketing and Administrative Expenses P 800 400 350 310 280 2,460 At the end of the month, finished goods inventories contained 1,500 units and 38,500 units were sold at an average sales price of Php1.75 per unit.
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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