ABC Company had 450 units of product on hand at January 1 costing P51 each. Purchases of Material A during the month of January were as follows: Units Unit Cost January 5 500 P52.00 January 13 550 P53.00 January 25 400 P54.00 Physical count on January 31 shows 550 units of Material A on hand. How much is the cost of materials issued to production under (A) FIFO method and (B) Average method?
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.
ABC Company had 450 units of product on hand at January 1 costing P51 each. Purchases of Material A during the month of
January were as follows:
Units Unit Cost
January 5 500 P52.00
January 13 550 P53.00
January 25 400 P54.00
Physical count on January 31 shows 550 units of Material A on hand.
How much is the cost of materials issued to production under (A) FIFO method and (B) Average method?
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