In July 2020, ABC Co. computed its equivalent unit costs under FIFO process costing as follows: Direct material P10 Direct labor 30 Packaging 20 Manufacturing overhead 15 Direct material and packaging are added at the start and end of processing, respectively. Beginning inventory cost was P500,000 and consisted of: • P100,000 direct material cost for 60,000 EUP; • P250,000 direct labor cost for 24,000 EUP; and • P150,000 manufacturing overhead cost 18,000 EUP. ABC Co. transferred a total of 500,000 units to finished goods during July and had 20,000 units in ending WIP inventory. The ending inventory units were 25 percent complete as to direct labor and 30 percent complete as to overhead.
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.
What was the total cost of the units started and complete in July?
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