XYZ manufactures household pumps which pass through three departments viz. Foundry, Machine Shop and Assembling. The manufacturing expenses are as follows : Foundry Machine Assembling Total Shop 2$ 50,000 90,000 10,000 10,000 70,000 1,05,000 Direct Wages 10,000 5,000 Works Overhead The factory cost of manufacturing a type 'C' pump was prepared by the company as follows : Materials 16 $ Direct Wageś : Foundry Machinery Shop Assembling 2 4 2 8 $1,05,000 $70,000 Works Overhead 150% of Direct Wages i.e., х 100 12 Total Cost 36 It seems that there is some fallacy. Try to correct it.
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.
Step by step
Solved in 2 steps with 2 images
