The Combate Corporation uses the raw materials and in process (RIP) inventory account. At the end of each month, all inventories are counted, their conversion components are estimated, and inventory account balances are adjusted accordingly. Raw materials are back-flushed from RIP account to finished goods. The following data is for the month of May: Raw materials purchases P5,100,000 Ending balance of RIP account 314,250 Conversion cost incurred 36,000 Conversion cost allocated 39,750| Beginning balance of RIP account 290,250
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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