The following were taken from the books of GK Company: January 1: RM P270,000; WIP P0; FG P45,000 (100 units); March 31: RM P169,000; WIP P0; FG P? (600 units). During the first quarter, direct materials used were P2,295,000; direct labor P2,500,000; factory overhead P1,250,000; sales were 12,500 units at P600 per unit. GK uses FIFO method of costing inventories. What is the amount of gross profit during the first quarter ended March 31?
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 were taken from the books of GK Company: January 1: RM P270,000; WIP P0; FG P45,000 (100 units); March 31: RM P169,000; WIP P0; FG P? (600 units). During the first quarter, direct materials used were P2,295,000; direct labor P2,500,000; factory
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