ABC Corp. had the following data for the month of June 2022: • Raw materials purchased on account is P325,000 Actual direct labor costs were P235,000 Actual OH costs were P155,000 Selling and administrative expenses were P155,200 Raw and in Process Inventory: ● ● ● ● ● Beginning were P43,000 including conversion cost of P12,000 Ending were P66,000 including conversion cost of P24,000 Finished goods Inventory: Beginning were P95,000 including conversion cost of P28,000 Ending were P70,000 including conversion cost of P18,000 What is the net income for the month of June if the GP rate is 40%
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.
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