J&G Manufacturing makes a single product by way of three separate processes. Details of production for the month ending June 30 were as follows: Process Process 2 Process 3 Process 1 $390,000 Input material: Material added Direct Labour cost Manufacturing Overhead Normal losses Output Scrap value of losses 16,250 kg $57.300 $61,000 8% $36,750 $92,200 $63,000 $112,800 $97,080 6% 6% 13,250 kg 12,000 kg $16.00/kg| $32.00/kg 13,750 kg The nature of the process requires equipment to be cleaned at the end of each month; hence there is no opening or closing stock of product in process. Required: i) The process account for each process: and ii) The abnormal loss/gain account(s) showing J & G Manufacturing true loss/gain.
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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