The following information has been taken from the cost records of Richards Company for the past year: Raw material used in production $326 Total manufacturing costs charged to production during the year (includes direct material, direct labor, and overhead equal to 60% of direct labor cost) 686 Cost of goods available for sale 826 Selling and Administrative expenses 25 Inventories Beginning Ending Raw Material $75 $ 85 Work in Process 80 30 Finished Goods 90 110 Refer to Richards Company. Direct labor cost charged to production during the year was 135 216 225 360
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 information has been taken from the cost records of Richards Company for the past year:
|
Raw material used in production |
$326 |
|
Total |
686 |
|
Cost of goods available for sale |
826 |
|
Selling and Administrative expenses |
25 |
|
Inventories |
Beginning |
Ending |
|
Raw Material |
$75 |
$ 85 |
|
Work in Process |
80 |
30 |
|
Finished Goods |
90 |
110 |
- Refer to Richards Company. Direct labor cost charged to production during the year was
- 135
- 216
- 225
- 360
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