Don Lieberman and Associates, a CPA firm, uses job order costing to capture the costs of its audit jobs. There were no audit jobs in process at the beginning of November. Listed below are data concerning the three audit jobs worked on during November. Direct materials Auditor labor costs Auditor hours Wildhorse Blossom Crane Wildhorse Inc. Blossom Inc. $660 $510 $5,900 $7,000 $ Overhead costs are applied to jobs on the basis of auditor hours, and the predetermined overhead rate is $54 per auditor hour. The Wildhorse Inc. job is the only incomplete job at the end of November. Actual overhead for the month was $12,100. (a) Determine the cost of each job. 76 Cost 94 Crane Inc. $290 $3,675 Balance in service contracts in process account $ 49 (b) Indicate the balance of the Service Contracts in Process account at the end of November.
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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