15. LO.4 (Cost accumulation) Croftmark Co. began operations on May 1, 2010. Its Work in Process Inventory account on May 31 appeared as follows: Direct material Direct labor Applied overhead Work in Process Inventory 277,200 192,000 Cost of completed jobs ?? 268,800 The company applies overhead on the basis of direct labor cost. Only one job was still in process on May 31. That job had $75,450 in direct material and $36,200 in direct labor cost assigned to it. a. What was the predetermined overhead application rate? b. What was the balance in WIP Inventory at the end of May? c. What was the total cost of jobs completed in May? D 16. LO.4 (Journal entries; cost accumulation) The following costs were incurred in February 2010 by Container Corp., which produces customized steel storage bins: Direct material purchased on account Direct material used for jobs: Job #217 Job #218 Other jobs $ 76,000 $44,800 7,200 53,600 105,600
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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