ree Co., a manufacturer of heating units, summarized the following information for the year 2022: a) Materials cost of P270,000 includes indirect materials and supplies of P75,000; b) Labor cost of P360,000 includes direct labor of P240,000; c) Factory overhead of P120,000 represents power and light; d) Selling and administrative overhead total P180,000. Conversion costs for 2022 amounted to:
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.
ree Co., a manufacturer of heating units, summarized the following information for the year 2022:
a) Materials cost of P270,000 includes indirect materials and supplies of P75,000;
b) Labor cost of P360,000 includes direct labor of P240,000;
c) Factory
d) Selling and administrative overhead total P180,000.
Conversion costs for 2022 amounted to:
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