Baggins Bed and Second Breakfast utilizes a job order costing system. They only had one job for the period. The material requisition form for the period has been provided below: Direct materials purchased $18,000 Direct materials used $17,600 In addition to the direct materials, the following amounts were incurred during production: $9,200 in direct labor and $6,500 in applied manufacturing overhead. They began the period with $4,300 in beginning balance for this job. What is the ending balance for this job?
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.
Baggins Bed and Second Breakfast utilizes a
| Direct materials purchased | $18,000 |
| Direct materials used | $17,600 |
In addition to the direct materials, the following amounts were incurred during production: $9,200 in direct labor and $6,500 in applied manufacturing
The manufcaturing costs comprises the direct materials, the direct labor and overhead applied costs. The ending WIP comprises the total cost of jobs incurred till date.
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