Billy Baroo Company uses a job order cost system. The following information was found in the Work-in-Process account for the month of July. Date Description Amount [DR. or (CR.)] July 1 Balance $12,500 July 31 Direct labor 39,000 July 31 Direct materials 54,000 July 31 Factory overhead 31,200 July 31 Transfer to finished goods (82,000 ) Billy Baroo applies overhead to production at a predetermined rate of 80% based on the direct labor cost. Job #23, the only job still in process at the end of July, has been charged with direct labor of $12,700. Direct material charged to Job #23 was:
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.
Billy Baroo Company uses a
| Date | Description | Amount [DR. or (CR.)] | |
| July 1 | Balance | $12,500 | |
| July 31 | Direct labor | 39,000 | |
| July 31 | Direct materials | 54,000 | |
| July 31 | Factory |
31,200 | |
| July 31 | Transfer to finished goods | (82,000 | ) |
Billy Baroo applies overhead to production at a predetermined rate of 80% based on the direct labor cost. Job #23, the only job still in process at the end of July, has been charged with direct labor of $12,700. Direct material charged to Job #23 was:
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