The books and records of a Manufacturing Co. present the following data for the month of February: Direct labor cost Rs. 160000 (factory overhead 150% of Direct labor cost) Cost of goods sold Rs. 560000 Inventory accounts showed three opening and closing balances: Feb.1 Feb.28 Raw materials Rs.80000 Rs. 86000 Work in process Rs.90000 Rs.120000 Finished goods Rs.140000 Rs.180000 OTHER DATA: Marketing expenses 5% of sale General & administrative expenses 10% of sale Sales of the month Rs.750000 Required: An income statement with supporting schedule showing cost of goods manufactured and sold.
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.
The books and records of a Manufacturing Co. present the following data for the month of February:
Direct labor cost Rs. 160000 (factory
Cost of goods sold Rs. 560000
Inventory accounts showed three opening and closing balances:
Feb.1 Feb.28
Raw materials Rs.80000 Rs. 86000
Work in process Rs.90000 Rs.120000
Finished goods Rs.140000 Rs.180000
OTHER DATA:
Marketing expenses 5% of sale
General & administrative expenses 10% of sale
Sales of the month Rs.750000
Required: An income statement with supporting schedule showing cost of goods manufactured and sold.
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