A new company started production. Job 10 was completed, and Job 20 remains in production. Here is the information from job cost sheets from their first and only jobs so far: Job 10 cost data Job 10 Hours Total Cost Direct materials $765 Direct labor 75 1,575 Manufacturing overhead 60 Total cost $2,400 Job 20 cost data Job 20 Hours Total Cost Direct materials $145 Direct labor 113 2,373 Manufacturing overhead 90 Total cost $2,608 Using the information provided: What is the balance in work in process? What is the balance in the finished goods inventory? If manufacturing overhead is applied on the basis of direct labor hours, what is the predetermined overhead rate
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.
A new company started production. Job 10 was completed, and Job 20 remains in production. Here is the information from
Job 10 cost data
| Job 10 | Hours | Total Cost |
|---|---|---|
| Direct materials | $765 | |
| Direct labor | 75 | 1,575 |
| Manufacturing |
60 | |
| Total cost | $2,400 |
Job 20 cost data
| Job 20 | Hours | Total Cost |
|---|---|---|
| Direct materials | $145 | |
| Direct labor | 113 | 2,373 |
| Manufacturing overhead | 90 | |
| Total cost | $2,608 |
Using the information provided:
- What is the balance in work in process?
- What is the balance in the finished goods inventory?
- If manufacturing overhead is applied on the basis of direct labor hours, what is the predetermined overhead rate
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