Bob Corp uses three products with the following production and cost information: P1 P2 MAS Total Units Produced & Sold 2,000 4,000 100 6,000 2,000 12,000 4,000 20,000 10,000 Direct labor hours Number of Machine Set-ups Number of Shipments Number Engineering change orders Direct labor cost per hour 150 250 500 200 225 275 700 15 10 30 РО.50 РO.50 PO.50 Direct material cost per unit P2.00 P2.00 P2.00 Selling price per unit P50.00 P15.00 P10.00 The factory overhead costs include set-ups of P45,000; shipping costs of P70,000; an engineering costs of P90,000.
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.
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