Problem no. 3 The Mongol Company uses the average costing method in its three processing departments. Direct materials are added in Departments 1 and 2. Direct materials in Department 2 are placed immediately on each unit as it is transferred in Below is a portion of October's cost of production report for Department 2: Work in process inventory, ending: Cost from prior department (8,900 x P2,047.00 Direct materials (8,900 x 200% x 267.00 P23) P0.03 Direct labor (8,900 x 60% x P0.28] 1,495.20 Manufacturing overhead (8,900 x 60% 534.00 X PO) During November, the following activity occurred in Department 2: Units transferred in 30,100 Cost transferred Costs added: Direct in P8,483.00
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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![Problem no. 3
The Mongol Company uses the average
costing method in its three processing
departments. Direct materials are added in
Departments 1 and 2. Direct materials in
Department 2 are placed immediately on each
unit as it is transferred in
Below is a portion of October's cost of
production report for Department 2:
Work in process inventory, ending:
Cost from prior department (8,900 x
P2,047.00
Direct materials (8,900 x 200% x
267.00
P23)
P0.03
X PO)
During November, the following activity
occurred in Department 2:
Units transferred in
30,100
Cost transferred
Costs added:
Direct
Direct
in
Direct labor (8,900 x 60 % x P0.28]
1,495.20
Manufacturing overhead (8,900 x 60%
534.00
materials
Labor
out
P1,683.00
P7,994.80
Manufacturing overhead (applied)
P2,021.00
P8,483.00
Units transferred
29,000
Ending work in process
inventory
75% complete
Questions:
1. What is the transferred in unit cost?
2. What is the materials unit cost
3. What is the direct labor unit cost?
4. What is the manufacturing overhead unit
cost?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8dbb316e-196a-4839-b23e-9d78ff88db51%2F6d95e419-ec81-4057-9d67-d7a0bbd97325%2Fg439cwb_processed.png&w=3840&q=75)
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