CIA Company uses a job-order cost system and had the following data available: Beginning direct-materials inventory P26,000 Beginning WIP inventory 64,000 Beginning finished-goods inventory 58,000 Direct materials purchased on account 148,000 Direct materials requisitioned 82,000 Direct-labor cost incurred 130,000 Factory overhead incurred 146,000 Cost of goods completed 292,000 Cost of goods sold 256,000 Overhead application rate 130% (as a percent of direct-labor cost) The journal entry to record the factory overhead costs incurred would include a _____. a) debit to Factory Department Overhead Control for P146,000 b) credit to Factory Department Overhead Control for P169,000 c) debit to WIP Inventory for P146,000 d) credit to WIP Inventory for P169,000
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.
Beginning direct-materials inventory P26,000
Beginning WIP inventory 64,000
Beginning finished-goods inventory 58,000
Direct materials purchased on account 148,000
Direct materials requisitioned 82,000
Direct-labor cost incurred 130,000
Factory
Cost of goods completed 292,000
Cost of goods sold 256,000
Overhead application rate 130% (as a percent of direct-labor cost)
The
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