Clapton Company manufactures custom guitars in a wide variety of styles. The following incomplete ledger accounts refer to transactions that are summarized for May: Materials May 1 Balance 32,500 May 31 Requisitions (a) 31 Purchases 130,500 Work in Process May 1 Balance (b) 31 Completed jobs (f) 31 Materials (c) 31 Direct labor (d) 31 Factory overhead applied (e) Finished Goods
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.
Clapton Company manufactures custom guitars in a wide variety of styles. The following incomplete ledger accounts refer to transactions that are summarized for May:
| Materials | |||||
|---|---|---|---|---|---|
| May 1 | Balance | 32,500 | May 31 | Requisitions | (a) |
| 31 | Purchases | 130,500 |
| Work in Process | |||||
|---|---|---|---|---|---|
| May 1 | Balance | (b) | 31 | Completed jobs | (f) |
| 31 | Materials | (c) | |||
| 31 | Direct labor | (d) | |||
| 31 | Factory |
(e) |
| Finished Goods | |||||
|---|---|---|---|---|---|
| May 1 | Balance | 0 | May 31 | Cost of goods sold | (g) |
| 31 | Completed jobs | (f) |
| Wages Payable | |||||
|---|---|---|---|---|---|
| May 31 | Wages incurred | 118,800 | |||
| Factory Overhead | |||||
|---|---|---|---|---|---|
| May 1 | Balance | 21,900 | May 31 | Factory overhead applied | (e) |
| 31 | Indirect labor | (h) | |||
| 31 | Indirect materials | 17,400 | |||
| 31 | Other overhead | 82,600 |
In addition, the following information is available:
a. Materials and direct labor were applied to the following jobs in May:
| Job No. | Style | Quantity | Direct Materials | Direct Labor | ||||||||
| 101 | AF1 | 230 | $26,140 | $17,000 | ||||||||
| 102 | AF3 | 380 | 36,240 | 24,000 | ||||||||
| 103 | AF2 | 200 | 15,400 | 8,000 | ||||||||
| 104 | VY1 | 260 | 35,460 | 27,000 | ||||||||
| 105 | VY2 | 150 | 17,950 | 14,000 | ||||||||
| 106 | AF4 | 140 | 7,660 | 5,000 | ||||||||
| Total | 1,360 | $138,850 | $95,000 |
b. Factory overhead is applied to each job at a rate of 150% of direct labor cost.
c. The May 1 Work in Process balance consisted of two jobs, as follows:
| Job No. | Style | Work in Process, May 1 |
|||
| 101 | AF1 | $6,800 | |||
| 102 | AF3 | 15,100 | |||
| Total | $21,900 |
d. Customer jobs completed and units sold in May were as follows:
| Job No. | Style | Completed in May |
Units Sold in May |
|
| 101 | AF1 | X | 184 | |
| 102 | AF3 | X | 304 | |
| 103 | AF2 | 0 | ||
| 104 | VY1 | X | 218 | |
| 105 | VY2 | X | 125 | |
| 106 | AF4 | 0 |
Required:
1. Determine the missing amounts associated with each letter and complete the following table. If required, round amounts to the nearest dollar. If an answer is zero, enter in "0". Enter all amounts as positive numbers.
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