Use the table below and record the amount in the appropriate column category. Cost Item Cost Prime cost Conversion Cost Factory Overhead Period Costs Rent on Factory equipment 11,000 Insurance on factory building 1,500 Raw materials 75,000 Sales Commissions 10,000 Utility costs for factory 900 Supplies for general office 300 Wages for assembly line workers 58,000 Depreciation on office equipment 800 Miscellaneous materials (Glue etc.) 1,100 Factory manager’s salary 5,700 Property taxes on factory building 400 Advertising for the laptops 14,000 Office Supervisor Salary 16,000 Depreciation of factory building 1,500
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.
Use the table below and record the amount in the appropriate column category.
|
Cost Item |
Cost |
|
Prime cost |
Conversion Cost |
Factory |
Period Costs |
|
Rent on Factory equipment |
11,000 |
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|
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Insurance on factory building |
1,500 |
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Raw materials |
75,000 |
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Sales Commissions |
10,000 |
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Utility costs for factory |
900 |
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Supplies for general office |
300 |
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Wages for assembly line workers |
58,000 |
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|
800 |
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Miscellaneous materials (Glue etc.) |
1,100 |
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Factory manager’s salary |
5,700 |
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Property taxes on factory building |
400 |
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Advertising for the laptops |
14,000 |
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Office Supervisor Salary |
16,000 |
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Depreciation of factory building |
1,500 |
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Solution:-
Using the above information recording the costs in appropriate section:-
Step by step
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