E20-8 Garnett Printing Corp. uses a job order cost system. The following data summarize the operations related to the first quarter's production. 1. Materials purchased on account $192,000 and factory wages incurred $87,300. 2. Materials requisitioned and factory labor used by job: Job Number Materials Factory Labor A20 $ 35,240 $18,000 22,000 15,000 25,000 7,300 $87,300 A21 42,920 A22 36,100 A23 39,270 General factory use (indirect) 4,470 $158,000 3. Manufacturing overhead costs incurred on account $39,500. 4. Depreciation on machinery and equipment $14,550. 5. Manufacturing overhead rate is 80% of direct labor cost. 6. Jobs completed during the quarter: A20, A21, and A23. Instructions Prepare entries to record the operations summarized above. (Prepare a schedule showing the individual cost elements and total cost for each job in item 6.)
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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