Under Pick Co.’s job order costing system-manufacturing overhead is applied to work in process using a predetermined annual overhead rate. During January 2020, Pick’s transactions included the following: Direct materials issued P90, 000 Indirect materials issued 8, 000 Manufacturing overhead incurred 125, 000 Manufacturing overhead applied 113, 000 Direct Labor costs 107, 000 Pick had neither beginning nor ending work in process inventory. What was the cost of jobs completed in January 2020?
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.
37. Under Pick Co.’s job order costing system-manufacturing
Direct materials issued P90, 000
Indirect materials issued 8, 000
Manufacturing overhead incurred 125, 000
Manufacturing overhead applied 113, 000
Direct Labor costs 107, 000
Pick had neither beginning nor ending work in process inventory.
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