Goo Company accumulated the following data for the current year: Rawmaterials — beginning inventory 90 000 units @ P7.00 Purchases 75,000 units @ P8.00 Purchases 120,000 units @ P8.50 The entity transferred 195,000 units of raw materials to work in process during the Year. Work in process — beginning inventory 50,000 units @ P14.00 Direct labor 3,100,000 Manufacturing overhead 2,950,000 Work in process — ending inventory 48,000 units @ P15.00 1. The entity used the FIFO method for valuing inventory. What is the cost of raw materials used? 2. Refer to Goo Company. What is the total manufacturing cost? 3. Refer to Goo Company. What is the cost of goods manufactured for the current year?
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.
Goo Company accumulated the following data for the current year:
| Rawmaterials — beginning inventory | 90 000 units @ P7.00 |
| Purchases | 75,000 units @ P8.00 |
| Purchases | 120,000 units @ P8.50 |
The entity transferred 195,000 units of raw materials to work in process during the Year.
| Work in process — beginning inventory | 50,000 units @ P14.00 |
| Direct labor | 3,100,000 |
| Manufacturing overhead | 2,950,000 |
| Work in process — ending inventory | 48,000 units @ P15.00 |
1. The entity used the FIFO method for valuing inventory. What is the cost of raw materials used?
2. Refer to Goo Company. What is the total
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