A sporting goods manufacturer buys wood as a direct material for baseball bats. The Forming department processes the baseball bats, and transfers the bats to the Finishing department where additional work is applied. The Forming department began manufacturing 10,000 bats during the month of May. There was no beginning inventory. Costs for The Forming department for the month of May follows: Direct materials Conversion costs P 33,000 17,000 A total of 8,000 bats were completed and transferred to the Finishing department, the remaining 2,000 bats were still in process at the end of the month. All of the Forming department's direct materials were placed in process, but on average, only 25% of the conversion cost was applied to the ending work in process inventory. 15. The cost allocated to units transferred to the Finishing department a P 50,000 b. P 40,000 c. P 53.000 d. P42,400 16. The cost allocated to the units in process at the end of the month a. P2,200 6. P4,000 c. P 4,800 d. P7,600
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.
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