The Chewbaca Company reported the following data related to its manufacturing operations between Year 1 and Year 2 (Chewbaca has a December 31st Fiscal year-end) Jan 1, Y2 Jan 1, Y1 Raw materials 10,200 3,800 Work in Process 22,600 18,500 Finished Goods 38,750 38,105 Cost Incurred: Raw materials purchased 88,700 Factory direct labor 178,960 Factory suppliers 43,650 Factory depreciation 105,000 President's salary 110,000 Sales force salaries 88,000 Sales force expenses 8,700 Heat, light, and power 16,000 Factory insurance 29,000 Calculate: a. The cost of materials requisitioned for production during the year. b. The cost of the units that were completed and transferred to finished goods during the year. c. The cost of goods sold during the year.
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.
The Chewbaca Company reported the following data related to its manufacturing operations between Year 1 and Year 2 (Chewbaca has a December 31st Fiscal year-end)
Jan 1, Y2 Jan 1, Y1
Raw materials 10,200 3,800
Work in Process 22,600 18,500
Finished Goods 38,750 38,105
Cost Incurred:
Raw materials purchased 88,700
Factory direct labor 178,960
Factory suppliers 43,650
Factory
President's salary 110,000
Sales force salaries 88,000
Sales force expenses 8,700
Heat, light, and power 16,000
Factory insurance 29,000
Calculate:
a. The cost of materials requisitioned for production during the year.
b. The cost of the units that were completed and transferred to finished goods during the year.
c. The cost of goods sold during the year.
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