Donna Corporation manufactures custom cabinets for kitchens. It uses a normalcosting system with two direct-cost categories—direct materials and direct manufacturing labor—and one indirect-cost pool, manufacturing overhead costs. It provides the following information about manufacturing overhead costs for April 2017. Actual direct materials used $60,000 Actual direct manufacturing labor costs paid in cash 54,000 Indirect materials used $3,000 Supervision and engineering salaries paid in cash $50,000 Plant utilities and repairs paid in cash 10,000 Plant depreciation $16,000 Actual direct manufacturing labor-hours 2,700 Cost of individual jobs completed and transferred to finished goods $180,000 Cost of goods sold $175,000 The following information is also available for 2017: Budgeted manufacturing overhead costs for 2017 $960,000 Direct manufacturing labor-hours for 2017 32,000 hours Present journal entries for (a) usage of direct and indirect materials, (b) manufacturing labor incurred, (c) manufacturing overhead costs incurred, (d) allocation of manufacturing overhead costs to jobs, (e) cost of jobs completed and transferred to finished goods, and (F) cost of good sold.
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.
Donna Corporation manufactures custom cabinets for kitchens. It uses a normalcosting system with two direct-cost categories—direct materials and direct manufacturing labor—and one indirect-
the following information about manufacturing overhead costs for April 2017.
Actual direct materials used $60,000
Actual direct manufacturing labor costs paid in cash 54,000
Indirect materials used $3,000
Supervision and engineering salaries paid in cash $50,000
Plant utilities and repairs paid in cash 10,000
Plant
Actual direct manufacturing labor-hours 2,700
Cost of individual jobs completed and transferred to finished goods $180,000
Cost of goods sold $175,000
The following information is also available for 2017:
Budgeted manufacturing overhead costs for 2017 $960,000
Direct manufacturing labor-hours for 2017 32,000 hours
Present
labor incurred, (c) manufacturing overhead costs incurred, (d) allocation of manufacturing overhead
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