Concord, Inc. manufactures ergonomically designed computer furniture. Concord uses a job order costing system. On November 30, the Work in Process Inventory consisted of the following jobs: Job No. Item Units Accumulated
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.
Concord, Inc. manufactures ergonomically designed computer furniture. Concord uses a job order costing system. On November 30, the Work in Process Inventory consisted of the following jobs:
| Job No. |
Item
|
Units
|
Accumulated Cost
|
||||||
|---|---|---|---|---|---|---|---|---|---|
|
CC723
|
Computer caddy
|
20,000 | $1,000,000 | ||||||
|
CH291
|
Chair
|
10,000 | 438,000 | ||||||
|
PS812
|
Printer stand
|
28,000 | 285,000 | ||||||
| $1,723,000 |
On November 30, Concord’s Direct Materials Inventory account totaled $691,000, and its Finished Goods Inventory totaled $3,476,400. Concord applies manufacturing
Concord purchased $648,000 in direct materials in December and incurred the following
|
Job No.
|
Materials
Issued |
Machine
Hours |
Direct Labor
Hours |
Direct Labor
Cost |
|||||
|---|---|---|---|---|---|---|---|---|---|
|
CC723
|
$194,000 | 18,000 | 12,200 | $126,400 | |||||
|
CH291
|
$17,000 | 4,400 | 3,800 | $49,200 | |||||
|
PS812
|
$211,000 | 19,600 | 17,300 | $208,500 | |||||
|
DS444
|
$256,000 | 19,000 | 15,000 | $147,000 |
The following jobs were completed in December and transferred to the Finished Goods Inventory:
|
Job No.
|
Item
|
Units
|
|||
|---|---|---|---|---|---|
|
CC723
|
Computer caddy
|
20,000 | |||
|
CH291
|
Chair
|
10,000 | |||
|
DS444
|
Desk
|
5,000 |
| (a) | Calculate the total cost of each of the four jobs worked on in December. | ||||||||||||||||||
|
| (b) | Calculate the total |
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|
| (c) | Calculate the cost of goods manufactured for December. | |||
|
| (d) | Calculate the balance in the Work in Process Inventory account on December 31. | |||
|
| (e) | Assume that Concord sold 8,200 computer caddies, 10,000 chairs, and 4,500 desks in December. Calculate Cost of Goods Sold for the month of December and the ending Finished Goods Inventory balance on December 31. (For computation purpose round per unit rates to 2 decimal places, e.g. 3.54. Round final answers to 0 decmial places, e.g. 45,000.) |
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