An outfit producer had the following transactions in its first month of processes relating to its only job, Job #A 012. a) Purchased 500 yards of silk @ Rs.8 per yard for cash. b) Requisitioned 300 yards of silk to produce Job #A 012. c) Incurred 50 hours of direct labor to produce Job #A 012; the average labor rate is Rs.9 per hour. d) Paid various factory overhead costs, Rs.650. e) Applied factory overhead at the rate of 145% of direct Material costs to Job #A 012. f) Completed Job #A 012. g) Sold Job #A 012, receiving cash of Rs.4,400. Required: 1. Record the above transactions in journal and close the FOH A/C 2. Enter the transactions in the T-accounts below. 3. Determine the ending balance of each account. 4. What was the gross profit earned on Job #A 012
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.
An outfit producer had the following transactions in its first month of processes relating to its only job, Job #A 012.
Required:
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