Warmuplang Corporation showed the following costs for 2020 Warehouse depreciation P 300,000 Salaries of warehouse supervisor 200,000 Increase in RM inventory 20,000 Direct material purchases 120,000 Direct labor costs incurred 180,000 Variable selling costs 80,000 Question 1: Under the absorption costing, the total product costs should be: Question 2: if the company produced and sold 100,000 and 90,000 units, respectively during 2020. How much would be the difference in net income under absorption and variable costing?
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.
Step by step
Solved in 2 steps with 5 images
