Akabanebashi uses backflush costing to account for its manufacturing costs. The trigger points for recording of inventories are the purchase of materials , the completion of products and sale finished goods. During the month of September 2015 , the following transactions occured: 1. Purchased raw materials on account 92,000 2. Requisitioned raw materials to production 92,000 3. Direct labor cost incurred 40,000 4. Manufacturing overhead costs 60,000 5. Cost of goods manufactured 192,000 5. Completed products sold at 50% markup on cost. Required: Prepare the journal entries to record above transactions
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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Akabanebashi uses backflush costing to account for its
1. Purchased raw materials on account 92,000
2. Requisitioned raw materials to production 92,000
3. Direct labor cost incurred 40,000
4. Manufacturing overhead costs 60,000
5. Cost of goods manufactured 192,000
5. Completed products sold at 50% markup on cost.
Required:
Prepare the
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