Entries for Materials GenX Furnishings Company manufactures designer furniture. GenX Furnishings uses a job order cost system. Balances on June 1 from the materials ledger are as follows: Fabric Polyester filling Lumber Glue The materials purchased during June are summarized from the receiving reports as follows: $122,400 Polyester filling 170,100 E Lumber 335,400 Glue 11,600 Materials were requisitioned to individual jobs as follows: Fabric Job 601 Job 602 Job 603 Factory overhead-indirect materials $23,900 7,200 53,500 2,300 Fabric $46,500 35,800 33,000 Polyester Filling $115,300 Lumber Glue $58,600 $156,700 63,700 137,200 43,200 76,300 $6,000 Total $261,800 236,700 152,500 6,000 Total $165,500 $370,200 $6,000 $657,000 The glue is not a significant cost, so it is treated as indirect materials (factory overhead).
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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