Vat Corporation manufactures rattan furniture sets for export and uses the job order cost system an accounting for its costs. You obtained from the corporation’s books and records the following information for the year ended December 31, 2001: The work in process inventory on January 1 was 20% less than the work in process inventory on December 31. The total manufacturing costs added during 2001 was P900,000 based on actual direct materials and direct labor but with manufacturing overhead applied on actual direct labor pesos The manufacturing overhead applied to process was 72% of the direct labor pesos, and it was equal to 25% of the total manufacturing costs. The cost of goods manufactured, also based on actual direct materials, actual direct labor and applied manufacturing overhead, was P850,000. The cost of direct materials used and the work-in-process inventory on December 31, 2001 is?
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.
Vat Corporation manufactures rattan furniture sets for export and uses the
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- The work in process inventory on January 1 was 20% less than the work in process inventory on December 31.
- The total
manufacturing costs added during 2001 was P900,000 based on actual direct materials and direct labor but with manufacturingoverhead applied on actual direct labor pesos - The manufacturing overhead applied to process was 72% of the direct labor pesos, and it was equal to 25% of the total manufacturing costs.
- The cost of goods manufactured, also based on actual direct materials, actual direct labor and applied manufacturing overhead, was P850,000.
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The cost of direct materials used and the work-in-process inventory on December 31, 2001 is?
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