Assume that the following events occurred at Lakewood, Incorporated last month. a. Incurred direct labor costs of $500,000. b. Completed work on 70 percent of the work in process. Costs are assigned equally across all work in process. c. Transferred 80 percent of the materials purchased to work in process. d. Purchased $590,000 in direct materials. e. Determined that manufacturing overhead was $525,000. f. The inventory accounts have no beginning balances. All costs incurred were debited to the appropriate account and credited to Accounts Payable. Required: Give the amounts for the following items in the Work-in-Process account:
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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