Mama Co. Employs the job order cost system. Data for the month just ended are summarized below: Work in Process, Beg P100,000 Direct Materials used for the month P200,000 Direct labor cost for the month P160,000 Factory overhead applied P120,000 (Set rate based on direct labor) Goods completed and transferred to stock P501,800 Ending Work in Process reffered to Jobs 105 and 107 The company charged Job 105 with direct labor cost of P12,000 and Job 107 charged with overhead of 9,600. 1. Assuming that 80% of the Goods manufactured was sold at a gross profit rate of 35%. Compute the Cost of Goods Sold. a. 78.200 b. 401,440 c. 658,200 d. 501,800
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.
Mama Co. Employs the
- Work in Process, Beg P100,000
- Direct Materials used for the month P200,000
- Direct labor cost for the month P160,000
- Factory overhead applied P120,000
(Set rate based on direct labor) - Goods completed and transferred to stock P501,800
- Ending Work in Process reffered to Jobs 105 and 107
- The company charged Job 105 with direct labor cost of P12,000 and Job 107 charged with overhead of 9,600.
1. Assuming that 80% of the Goods manufactured was sold at a gross profit rate of 35%. Compute the Cost of Goods Sold.
a. 78.200
b. 401,440
c. 658,200
d. 501,800
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