are Corporation has provided the following data concerning last month’s manufacturing operations. Purchases of raw materials $ 30,000 Indirect materials used in production $ 5,000 Direct labor $ 58,000 Manufacturing overhead applied to work in process $ 87,000 Underapplied overhead $ 4,000 Inventories Beginning Ending Raw materials $ 12,000 $ 18,000 Work in process $ 56,000 $ 65,000
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.
Primare Corporation has provided the following data concerning last month’s manufacturing operations.
| Purchases of raw materials | $ 30,000 |
|---|---|
| Indirect materials used in production | $ 5,000 |
| Direct labor | $ 58,000 |
| Manufacturing overhead applied to work in process | $ 87,000 |
| Underapplied overhead | $ 4,000 |
| Inventories | Beginning | Ending |
|---|---|---|
| Raw materials | $ 12,000 | $ 18,000 |
| Work in process | $ 56,000 | $ 65,000 |
| Finished goods | $ 35,000 | $ 42,000 |
Required:
1. Prepare a schedule of cost of goods manufactured for the month (see picture below for reference).
2. Prepare a schedule of cost of goods sold for the month. Assume the underapplied or overapplied overhead is closed to Cost of Goods Sold.
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