Crane Company uses a job order cost system. On May 1, the company has balances in Raw Materials Inventory of $15,000 and Work in Process Inventory of $3,400 and two jobs in process: Job No. 429 $2,100, and Job No. 430 $1,300. During May, the company incurred factory labor of $14,100. A summary of source documents reveals the following. Job Number 429 430 431 General use (a & b) Materials Requisition Slips (a) (b) $2,600 3,600 4,500 $10,700 900 $11,600 Labor Time Tickets $2,000 3,100 7,700 Crane Company applies manufacturing overhead to jobs at an overhead rate of 60% of direct labor cost. Job No. 429 is completed during the month. $12,800 1,300 $14,100 Record the May 1 inventory balances and the factory labor incurred. Record (1) material usage from requisition slips, (2) factory labor usage from time tickets, (3) the assignment of manufacturing overhead to jobs, and (4) the completion of Job No. 429.
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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