The following information for the year ended December 31, 2005 is obtained from the books and records of a factory. Completed jobs Kshs. Work-in-progress Kshs. Raw materials supplied from stores Wages 90,000 30,000 100,000 40,000 Materials transferred to work -in-progress 2,000 2,000 Materials retumed to stores 1,000 Factory overhead is 80% of wages and administration overhead 25% of factory cost. The value of the jobs during 2005 was Kshs. 410,000 Prepare: (1) Consolidated completed jobs account showing the profit made or loss incurred on the jobs. (ii) Consolidated work – in – progress account.
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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