Direct Materials Direct Labor House 402 $ 44,000 32,000 58,000 57,000 $ 58,000 62,000 House 403 House 404 61,000 86,000 House 405
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.
Accounting for transactions, construction company
Superior Construction, Inc. is a home builder in Arizona. Superior uses a
a. Purchased materials on account, $400,000.
b. Requisitioned direct materials and used direct labor in construction. Recorded the materials requisitioned.
c. The company incurred total wages of $300,000. Use the data from Item b to assign the wages. Wages are not yet paid.
d.
e. Other overhead costs incurred: Equipment rentals paid in cash, $30,000; Worker liability insurance expired, $7,000.
f. Allocated overhead to jobs.
g. Houses completed: 402, 404.
h. House sold on account: 404 for $250,000.
Requirements
- Calculate Superior’s predetermined overhead allocation rate for the year.
- Prepare
journal entries to record the events in the general journal.
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