Cost of Normal Spoilage Frieling Company installs granite countertops in customers' homes. First, the customer chooses the particular granite slab, and countertop area at the customer's home, cuts the granite to that shape, and installs it. The Tramel job calls for direct material of $1,200. Overhead is applied at the rate of 110 percent of direct labor cost. Unfortunately, one small countertop breaks duri must cut another piece and install it to properly complete the job. The additional rework required direct materials costing $1,4 $1,100. Assume that the spoilage was due to carelessness by a Frieling worker and it is considered to be normal spoilage. Required: 1. Calculate the cost of the Tramel job. 2. Make any needed journal entry to the overhead control account. If an amount box does not require an entry, leave it blank 3. What if the additional rework required $2,200 of direct labor? What would be the effect on the cost of the Tramel job?
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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