Suppose that the following table shows the financial data of a manufacturing company at the beginning of the period, during the period and at the end of the period. What is the total cost of production? Period Beginning Ending 20,000.00 Within Raw materials 30,000.00 Raw material purchases (paid in cash) Direct labor costs (paid in cash) Indirect labor costs (paid in cash) 390,000.00 208,000.00 114,000.00 78,000.00 Factory/machinery depreciation Rent expense - headquarters (paid in cash) Sales revenue (received in cash) Work-in process Finished goods 20,000.00 800,000.00 40,000.00 90,000.00 70,000.00 10,000.00 800.000 750.000 700.000 850.000
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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