Last month, Company J placed P60,000 of materials into production. The Printing Department used 8,000 labor hours at P5.60 per hour and the Binding Department used 4,600 hours at P6.00 per hour. Factory overhead is applied at a rate of P6.00 per labor hour in the Binding department. Company J’s inventory accounts show the following balances: Beginning Ending Finished Goods P22,000 P17,000 Work in Process 15,000 17,600 Materials 20,000 18,000 What is the cost of goods sold? a.P219,600
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.
Last month, Company J placed P60,000 of materials into production. The Printing Department used 8,000 labor hours at P5.60 per hour and the Binding Department used 4,600 hours at P6.00 per hour. Factory
Beginning Ending
Finished Goods P22,000 P17,000
Work in Process 15,000 17,600
Materials 20,000 18,000
What is the cost of goods sold?
Step by step
Solved in 2 steps
