What is the Cost of Goods Sold for the year ended December 31, 2016?
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.
HONDA Inc, is using Just-in-Time Production System and Backflush Cost Accounting System for the year ended December 31, 2016. The following information was provided for the year 2016:
a. Raw materials purchased for year 2016 totaled P1,000,000.
b. Direct labor for the year 2016 totaled P500,000.
c. Actual
d. The production report for year 2016 showed that the Finished Goods Inventory at December 31 was P200,000 consisting of:
Direct Materials 110,000 Direct Labor 60,000 Factory Overhead 30,000
Req: What is the Cost of Goods Sold for the year ended December 31, 2016?
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