Costing Perpetual and Periodic Inventory

Question: Describe about the Costing for Perpetual and Periodic Inventory. Answer: 1: Cost of goods manufactured Cost of goods sold Particulars Amounts in $ Particulars Amounts in $ Beginning raw materials inventory 5,65,000.00 Beginning inventory 3,20,000.00 Add: cost of raw material purchased 4,25,000.00 Add: purchases 48,80,000.00 Less: ending raw material 8,50,000.00 Less: ending inventory 12,00,000.00 Raw material used 1,40,000.00 Cost of goods sold 40,00,000.00 Add: direct labour cost 8,64,000.00 Add: manufacturing overhead 13,50,000.00 Total manufacturing overhead 23,54,000.00 Change in the work in progress inventory 10,00,000.00 Cost of goods manufactured 33,54,000.00 2: Statement of after tax income computation Particulars Amounts in $ Amounts in $ Sales revenue 80,00,000.00 Less: cost of goods sold 40,00,000.00 Gross profit 40,00,000.00 Less: expenses: Selling and administration 4,00,000.00 4,00,000.00 Net profit before taxes 36,00,000.00 3: Difference between job and process costing: The following are the main differences between the 2: Job costing is for the unique products whereas the process costing is of the standardised products. The job costing is used for the smaller production runs and process costing is for the larger production runs. A detailed amount of records is required for job coting whereas process costing requires aggregates of the various costs and so, not much of the records are required. Job costing is sued for the billing of the individual customers whereas the process costing is for the commissioned customers (Accounting tools, 2016). 4: Monthly production reports is a part of the periodic inventory system since under this type of the production system, the inventory records are updated in the end of each of the accounting period. Now, this accounting period could be the end of the month, end of the year etc. (Accounting explanation, 2016). References: Difference Between Perpetual and Periodic Inventory System - AccountingExplanation.com. (2016).Accountingexplanation.com. Retrieved 7 October 2016, from https://www.accountingexplanation.com/difference_between_perpetual_and_periodic_inventory_system.htm What is the difference between job costing and processcosting? - Questions Answers - AccountingTools. (2016).Accountingtools.com. Retrieved 7 October 2016, from https://www.accountingtools.com/questions-and-answers/what-is-the-difference-between-job-costing-and-process-costi.html