The following cost data are available for Honesty Co. for its first month of operations: Job 201 Job 202 Job 203 Direct materials 60,000 90,000 56,000 Direct labor cost at 40 per hour 18,000 36,000 38,000 Overhead is applied at the rate of 32 per direct labor hour. Job no. 201 and 202 were completed. Job no. 201 was sold, and job no. 203 remained incomplete at the end of the month. Honesty Co. incurred the following costs for the month: Direct material purchases, 300,000; Direct and indirect labor costs, 96,000; Factory overhead excluding indirect labor and indirect materials, 59,200; Indirect materials, 4,000. How much is the cost of goods manufactured for the month?
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 following cost data are available for Honesty Co. for its first month of operations:
Job 201 Job 202 Job 203
Direct materials 60,000 90,000 56,000
Direct labor cost at 40 per hour 18,000 36,000 38,000
How much is the cost of goods manufactured for the month?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
