Lucena Products provided the following information: · Raw materials on hand- P85,000 · Raw materials used (including indirect materials of P35,000)- P258,000 · Labor (including indirect labor of P22,000; selling of P45,000; and administrative of P60,000)- P275,00 · Manufacturing overhead costs (including indirect materials and indirect labor)- P135,000 · Abnormal wasted materials and labor - P25,000 · Finished goods on hand- P160,000 How much inventory should be reported in the statement of financial position?
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.
Lucena Products provided the following information:
· Raw materials on hand- P85,000
· Raw materials used (including indirect materials of P35,000)- P258,000
· Labor (including indirect labor of P22,000; selling of P45,000; and administrative of P60,000)- P275,00
·
· Abnormal wasted materials and labor - P25,000
· Finished goods on hand- P160,000
How much inventory should be reported in the
Step by step
Solved in 2 steps
