The beginning work in process inventory in the Assembly Department of the Love Company on March 1 was 600 units, to which 60% of labor had been applied at a cost of P2,880. During March, 8,000 units were transferred into the department and 7,200 units were transferred out to the next department. Labor costs of P91,227 were incurred during the month. The units in the ending work in process in the Assembly Department were estimated to be 30% complete as to labor. What is the labor cost in the units transferred out during the month? а. Р80,964 b. P89,064 с. Р88,920 d. P86,400
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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