TABLE 11.10 For Problems 11.9, 11.10, and 11.11 LAST YEAR THIS YEAR Sales $ 215,000 $ 228,000 Cost of goods sold 121,000 131,000 Gross margin 94,000 97,000 Other expenses 49,000 49,000 Net income 45,000 48,000 Finished goods inventory 2,000 5,000 Work-in-process inventory 10,000 12,000 Raw material inventory 5,000 6,000 23,000 Total inventory (average for year) 17,000 Other current assets 91,000 110,000 Other assets 213,000 242,000 Total assets 321,000 375,000
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.
| Based on the data in Table 11.10 determine: a) How many weeks of fin ished goods were on hand at the end of last year. b) How many weeks of finished goods were on hand at the end of this year. |
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