b) Raw materials were used in production, $52.880 direct (45% to Job #13: 55% to Job #14) and $17.897 indirect. c) Salaries and wages costs incurred totalled $159.678 and included: Direct labor cost Indirect labor cost Sales salaries $86,200 $49,712 (Job #13 - $44920; Job #14 - S41,280) $23,766 d) Factory equipment depreciation expense, $27,530. e) Factory utility costs incurred, $9,273. f) Manufacturing overhead is applied at a predetermined rate of 120% of direct labor cost. g) Completed Job #14, h) Shipped Job #14 and billed customer $215.000 on account Shipping costs incurred to send product to customer, $3,580. i) Dispose of over- or under-applied factory overhead. REQUIRED: Record the transactions in the t-accounts provided. Use the letters to key your entries.
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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