The following expenses were incurred for a job during the year ending 31st December 2018. Direct Material $6,000 Direct wages $8,000 Chargeable expenses $2,000 Factory overheads $4,000 selling and distribution overheads $4,000 Administration overheads $6,000 The selling price for the above job was $36,000. you are required to prepare a statement showing the profit earned for the year 2018 from the job and an estimated price of a job which is to be executed in the year 2019. material, wages, and chargeable expenses will be required of $10,000, $14,000, and $4,000 respectively for the job. The various overheads are to be recovered on the following basis while calculating the price: a) Factory overheads as a percentage of direct wages. b) Administration and selling and distribution as a percentage of factory cost
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 expenses were incurred for a job during the year ending 31st December 2018.
Direct Material $6,000
Direct wages $8,000
Chargeable expenses $2,000
Factory
selling and distribution overheads $4,000
Administration overheads $6,000
The selling price for the above job was $36,000. you are required to prepare a statement showing the profit earned for the year 2018 from the job and an estimated price of a job which is to be executed in the year 2019. material, wages, and chargeable expenses will be required of $10,000, $14,000, and $4,000 respectively for the job.
The various overheads are to be recovered on the following basis while calculating the price:
a) Factory overheads as a percentage of direct wages.
b) Administration and selling and distribution as a percentage of
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