Denver Company uses a job costing system. The work in process inventory on December 31 consisted of Job No. 173 with a balance of $66,300. Job No. 173 has been charged with manufacturing overhead costs of $20,900. Denver allocates manufacturing overhead costs at a rate of 60% of direct labor cost. What was the amount of direct materials charged to Job No. 173? OA. $10,567 OB. $18,880 OC. $12,540 OD. $8,313 access
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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