The following partially completed T-accounts summarize transactions for Faaberg Corporation during the year: Raw Materials Debit Credit Beginning Balance 5,500 10,000 5,700 Work in Process Debit Credit Beginning Balance 4,600 22,700 6,700 9,000 8,800 Finished Goods Debit Credit Beginning Balance 2,700 20,900 22,700 Manufacturing Overhead Debit Credit 3,300 8,800 4,000 3,700 Wages & Salaries Payable Debit Credit 20,900 Beginning Balance 3,000 13,000 Cost of Goods Sold Debit Credit 20,900 The direct materials cost was:
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 partially completed T-accounts summarize transactions for Faaberg Corporation during the year:
| Raw Materials | |||
|---|---|---|---|
| Debit | Credit | ||
| Beginning Balance | 5,500 | 10,000 | |
| 5,700 | |||
| Work in Process | |||
|---|---|---|---|
| Debit | Credit | ||
| Beginning Balance | 4,600 | 22,700 | |
| 6,700 | |||
| 9,000 | |||
| 8,800 | |||
| Finished Goods | |||
|---|---|---|---|
| Debit | Credit | ||
| Beginning Balance | 2,700 | 20,900 | |
| 22,700 | |||
| Manufacturing |
|||
|---|---|---|---|
| Debit | Credit | ||
| 3,300 | 8,800 | ||
| 4,000 | |||
| 3,700 | |||
| Wages & Salaries Payable | |||
|---|---|---|---|
| Debit | Credit | ||
| 20,900 | Beginning Balance | 3,000 | |
| 13,000 | |||
| Cost of Goods Sold | |||
|---|---|---|---|
| Debit | Credit | ||
| 20,900 | |||
The direct materials cost was:
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