Coronado Company produces high-quality microscopes for education and health care uses. The company uses a job order costing system. Because the microscopes’ optics require significant manual labor to ensure adherence to strict manufacturing specifications, the company applies overhead on the basis of direct labor hours. At the beginning of 2021, the company estimated its manufacturing overhead would be $1,960,000 and that employees would work a total of 49,000 direct labor hours. During March, the company worked on the following five jobs: Job Beginning Balance Direct Materials added during March Direct Labor added during March Direct Labor Hours added during March 134 $120,600 $6,000 $9,400 140 158 125,450 3,500 12,160 450 212 21,800 88,400 36,650 3,500 287 36,350 71,800 31,850 2,550 301 18,990 21,845 1,400 Total $304,200 $188,690 $111,905 8,040 Jobs 134 and 158 were started in January, Jobs 212 and 287 were started in February, and Job 301 was started in March. During March, workers completed Jobs 134, 158, and 212. Jobs 134 and 212 were delivered to customers during March. Actual overhead for the month of March was $176,300. The manufacturing overhead account is disposed of annually, not monthly. Calculate the Cost of Goods Sold for March. Cost of Goods Sold for March $enter the cost of goods sold for March in dollars
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.
Coronado Company produces high-quality microscopes for education and health care uses. The company uses a
| Job | Beginning Balance |
Direct Materials added during March |
Direct Labor added during March |
Direct Labor Hours added during March |
|||||
|---|---|---|---|---|---|---|---|---|---|
|
134
|
$120,600 | $6,000 | $9,400 | 140 | |||||
|
158
|
125,450 | 3,500 | 12,160 | 450 | |||||
|
212
|
21,800 | 88,400 | 36,650 | 3,500 | |||||
|
287
|
36,350 | 71,800 | 31,850 | 2,550 | |||||
|
301
|
18,990 | 21,845 | 1,400 | ||||||
|
Total
|
$304,200 | $188,690 | $111,905 | 8,040 |
Jobs 134 and 158 were started in January, Jobs 212 and 287 were started in February, and Job 301 was started in March. During March, workers completed Jobs 134, 158, and 212. Jobs 134 and 212 were delivered to customers during March.
Actual overhead for the month of March was $176,300. The manufacturing overhead account is disposed of annually, not monthly.
Calculate the Cost of Goods Sold for March.
| Cost of Goods Sold for March | $enter the cost of goods sold for March in dollars |
Job costing: It is a method of costing where in all the costs like direct material, direct labor and manufacturing overhead are accumulated to a particular job. This method is suitable for jobs where the work is to be performed according to the specifications of a customer and in separate batches.
Raw materials: It is the basic input required to manufacture the finished products. The raw materials are processed by incurring conversion costs and other overhead to convert them into finished products.
Direct labor: It is the cost of salaries and wages incurred directly to produce a product. This cost is incurred to convert the raw materials into finished product.
Manufacturing overhead: It is the indirect cost incurred as a part of manufacturing the products. These costs are not directly related to the units manufactured. So they are allocated to the manufactured units based on estimated cost drivers.
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