Manufacturing costs for Davenport Company during 2018 were as follows: Beginning Finished Goods, 1/1/18 $ 25,200 Beginning Raw Materials, 1/1/18 36,600 Beginning Work in Process, 1/1/18 111,400 Direct Labor for 2018 276,400 Ending Finished Goods, 12/31/18 23,500 Ending Raw Materials, 12/31/18 40,800 Ending Work in Process, 12/31/18 121,700 Material Purchases for 2018 305,300 (including $20,500 of indirect material) Required: 1. Compute cost of goods manufactured. 2. Compute cost of goods sold.
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.
| Beginning Finished Goods, 1/1/18 | $ | 25,200 |
| Beginning Raw Materials, 1/1/18 | 36,600 | |
| Beginning Work in Process, 1/1/18 | 111,400 | |
| Direct Labor for 2018 | 276,400 | |
| Ending Finished Goods, 12/31/18 | 23,500 | |
| Ending Raw Materials, 12/31/18 | 40,800 | |
| Ending Work in Process, 12/31/18 | 121,700 | |
| Material Purchases for 2018 | 305,300 | |
| (including $20,500 of indirect material) | ||
Required:
1. Compute cost of goods manufactured.
2. Compute cost of goods sold.
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