Within the costing system of Asempa manufacturing company the following types of expense are incurred. GHȼ Cost of oils used to lubricate production machinery 20,000 Motor vehicle licences for lorries 50,000 Depreciation of factory plant and equipment 40,000 Cost of chemicals used in the laboratory 10,000 Commission paid to sales representatives 25,000 Salary of the secretary to the finance director 22,000 Trade discount given to customers 12,000 Holiday pay of machine operatives 32,000 Salary of security guard in raw material warehouse 15,000 Fees to advertising agency 8,000 Rent of finished goods warehouse 6,000 Salary of scientist in laboratory 5,000 Insurance of the company's premises 16,000 Salary of supervisor working in the factory 7,000 Cost of typewriter ribbons in the general office 14,000 Protective clothing for machine operatives 36,000 Required Calculate the amount of expenses incurred under the correct cost classification according to function. Each of expenses should appear only once in your answer.
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.
Within the costing system of Asempa manufacturing company the following types of expense are incurred.
GHȼ
Cost of oils used to lubricate production machinery 20,000
Motor vehicle licences for lorries 50,000
Depreciation of factory plant and equipment 40,000
Cost of chemicals used in the laboratory 10,000
Commission paid to sales representatives 25,000
Salary of the secretary to the finance director 22,000
Trade discount given to customers 12,000
Holiday pay of machine operatives 32,000
Salary of security guard in raw material warehouse 15,000
Fees to advertising agency 8,000
Rent of finished goods warehouse 6,000
Salary of scientist in laboratory 5,000
Insurance of the company's premises 16,000
Salary of supervisor working in the factory 7,000
Cost of typewriter ribbons in the general office 14,000
Protective clothing for machine operatives 36,000
Required
Calculate the amount of expenses incurred under the correct cost classification according to function. Each of expenses should appear only once in your answer.
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