The records of the Levitz Manufacturing Company for the six months ended June 30, 2002 provided the following data: Inventories December 31st 2001 December 31st 2002 Raw Materials 117,000 41,600 Factory Supplies 320 560 Work in Process 30,400 51,380 Finished Goods 113,500 121,300 Other data: Direct Labour 101,000 Depreciation: Machinery 3,800 Indirect Labour 6,900 Depreciation: factory building 1,100 Power and Light 3,200 Tool Expenses 1,645 Heat 1,750 Factory supplies purchased 3,100 Fire insurance 600 Raw materials purchased 314,000 Superintendence 11,200 Compensation insurance 1,900 Required: A statement of Cost of goods manufactured and sold for the six month ended, with a separate schedule for the factory overhead and a calculation of over or under-applied factory overhead. The company applies factory overhead at the rate of 50% of direct labour 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 records of the Levitz Manufacturing Company for the six months ended June 30, 2002 provided the following data:
Inventories December 31st 2001 December 31st 2002
Raw Materials 117,000 41,600
Factory Supplies 320 560
Work in Process 30,400 51,380
Finished Goods 113,500 121,300
Other data:
Direct Labour 101,000
Indirect Labour 6,900 Depreciation: factory building 1,100
Power and Light 3,200 Tool Expenses 1,645
Heat 1,750 Factory supplies purchased 3,100
Fire insurance 600 Raw materials purchased 314,000
Superintendence 11,200 Compensation insurance 1,900
Required: A statement of Cost of goods manufactured and sold for the six month ended, with a separate schedule for the factory
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