In June, Olympic Company purchased materials costing $38,000, and incurred direct labor cost of $42,000. Overhead totaled $27,000 for the month. Information on inventories was as follows: June 1 June 30 Materials $3,000 $2,700 Work in process 1,000 1,275 Finished goods 2,500 1,775 Required: A. Calculate the cost of direct materials used during June. B. Calculate the total manufacturing cost for June. C. Calculate the cost of goods manufactured for June. D. Calculate the cost of goods sold for June.
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.
|
June 1 |
June 30 |
|
| Materials |
$3,000 |
$2,700 |
| Work in process |
1,000 |
1,275 |
| Finished goods |
2,500 |
1,775 |
Required:
| A. | Calculate the cost of direct materials used during June. |
| B. | Calculate the total |
| C. | Calculate the cost of goods manufactured for June. |
| D. | Calculate the cost of goods sold for June. |
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