Wasik Company had the following inventory balances at the beginning and end of August 2013: August 1 August 31 Raw material inventory 58,000 84,000 Work in Process Inventory 372,000 436,000 Finished Goods Inventory 224,000 196,000 All raw material is direct to the production process. The following information is also available about August manufacturing costs: Cost of raw material used 612,000 Direct labor cost 748,000 Manufacturing overhead 564,000 b.) Determine the cost of goods sold for August.
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.
Wasik Company had the following inventory balances at the beginning and end of August 2013:
August 1 August 31
Raw material inventory 58,000 84,000
Work in Process Inventory 372,000 436,000
Finished Goods Inventory 224,000 196,000
All raw material is direct to the production process. The following information is also available about August
Cost of raw material used 612,000
Direct labor cost 748,000
Manufacturing
b.) Determine the cost of goods sold for August.
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