The following cost data were taken from the records of a manufacturing company: Depreciation on factory equipment P 1,000 Depreciation on sales office 500 Advertising 7,000 Freight-out (shipping) 3,000 Wages of production workers 28,000 Raw materials used 47,000 Indirect Materials Used 2,000 Sales salaries and commissions 10,000 Factory rent (20% - administrative) 2,500 Factory insurance 500 Materials handing 1,500 Administrative salaries 2,000 Based upon this information, the manufacturing cost incurred during the year was: a. 82,000 b. 80,000 c. 80,500 d. 83,000
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.
The following cost data were taken from the records of a manufacturing company:
Depreciation on sales office 500
Advertising 7,000
Freight-out (shipping) 3,000
Wages of production workers 28,000
Raw materials used 47,000
Indirect Materials Used 2,000
Sales salaries and commissions 10,000
Factory rent (20% - administrative) 2,500
Factory insurance 500
Materials handing 1,500
Administrative salaries 2,000
Based upon this information, the
a. 82,000
b. 80,000
c. 80,500
d. 83,000
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