Computing job costs and gross profit P1 P2 P3 Information on Kwon Mfg.’s activities for its first month of operations follows. a. Purchased $100,000 of raw materials on credit. b. Materials requisitions show the following materials used for the month. Job 201 $48,200 Job 202 23,600 Total direct materials 71,800 Indirect materials 8,620 Total materials used $80,420 c. Time tickets show the following labor used for the
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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Computing job costs and gross profit P1 P2 P3
Information on Kwon Mfg.’s activities for its first month of operations follows.
a. Purchased $100,000 of raw materials on credit.
b. Materials requisitions show the following materials used for the month.
Job 201 $48,200
Job 202 23,600
Total direct materials 71,800
Indirect materials 8,620
Total materials used $80,420
c. Time tickets show the following labor used for the month.
Job 201 $39,200
Job 202 12,600
Total direct labor 51,800
Indirect labor 24,200
Total labor used $76,000
d. Applied overhead to Job 201 and to Job 202 using a predetermined overhead rate of 80% of direct materials cost.
e. Transferred Job 201 to Finished Goods Inventory.
f. (1) Sold Job 201 for $163,760 on credit. (2) Record cost of goods sold for Job 201.
g. Incurred the following actual other overhead costs for the month.
Rent on factory building (payable) 500
Factory utilities (payable) 800
Expired factory insurance 3,000
Total other
1. Prepare a
2. Compute gross profit on the sale of Job 201.
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