The following data pertain to the production of the second department of Manufacturing Corp. for the month of March: WIP, beg 5,000 units ; 1⁄2 done Received from department A 20,000 units @ P1 WIP, end 6,000 units; 2/3 doneLost units 2,000 units Cost data:WIP, beg P14,100 Cost this Dep’tMaterials 39,900 Direct labor 23,940 Factory Overhead 15,960 Factory costs are evenly applied and all lost units were considered normal. Required: Prepare the cost of production report of Department B for the month of March assuming the following independent cases:[a] Loss occurred at the start of process; [b] Loss occurred during process; [c] Loss occurred at the end of process.
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 following data pertain to the production of the second department of Manufacturing Corp. for the month of March:
WIP, beg 5,000 units ; 1⁄2 done
Received from department A 20,000 units @ P1
WIP, end 6,000 units; 2/3 doneLost units 2,000 units
Cost data:WIP, beg P14,100
Cost this Dep’tMaterials 39,900
Direct labor 23,940
Factory
Required: Prepare the cost of production report of Department B for the month of March assuming
the following independent cases:[a] Loss occurred at the start of process;
[b] Loss occurred during process;
[c] Loss occurred at the end of process.
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