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Cost Accumulation + Cost Measurement
Cost Accumulation + Cost Measurement
Cost Accumulation + Cost Measurement
Top Glove Corporation Bhd using Job Order Costing system for assigning and
accumulating manufacturing costs of an individual unit of output. The job order
costing system is used when the various items produced are sufficiently different from
each other and each has a significant cost. There are 4 production which produce
different types of gloves. The total manufacturing cost is calculated by adding direct
material, direct labour and manufacturing overhead. The total manufacturing cost for
Latex glove production is RM 1,725,099.00, Nitrile glove production is RM
1,495,100.00, Vinyl glove is RM 878,100.00 and CPE/TPE glove production is RM
1,881,000.00.
COST MEASUREMENT
The product costs that make up Normal Costing are actual materials, actual direct
costs and manufacturing overhead. The materials and direct costs are the true costs
that are associated with producing the items such as raw material and labour. In this
costing approach, manufacturing overhead is an estimated rate decided by
management.
As per shown in the table the direct material was accumulate by direct material for
each production divided by total direct material. The direct labour was accumulating
by direct labour for each production divided by total direct labour. The manufacturing
overhead was accumulate by Manufacturing Overhead + Depreciation for each
production divided by total manufacturing overhead