Cheyenne Company manufactures a single product by a continuous process involving two production departments. The records indicate that $123,200 of direct materials were issued to and $176,000 of direct labor was incurred by Department 1 in the manufacture of the product. The factory overhead rate is $25 per machine hour; machine hours were 4.400 in Department 1. Work in process inventory in the department at the beginning of the period totaled $30,800; and work in process inventory at the end of the period was $22,000. (a) Prepare entries to record the following transactions: The flow of costs into Department 1 for (1) direct materials (2) direct labor (3) manufacturing overhead (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) No. Account Titles and Explanation (1) (2) Debit Credit
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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