FJW Manufacturing Co. produces only one product. You have obtained the following information from the corporation’s books and records for the year ended December 31, 2021: a. Total manufacturing cost during the year was $1,000,000, including direct materials, direct labor, and factory overhead. b. Cost of goods manufactured during the year was $970,000. c. Factory overhead charged to work in process was 75% of direct labor cost and 27% of the total manufacturing cost. d. The beginning work in process inventory, January 1, was 40% of the ending work in process inventory, December 31. Required: Prepare a statement of cost of goods manufactured for the year ended December 31 for FJW Manufacturing company.
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.
Question No. 1
FJW Manufacturing Co. produces only one product. You have obtained the following information from the corporation’s books and records for the year ended December 31, 2021:
a. Total
labor, and factory overhead.
b. Cost of goods manufactured during the year was $970,000.
c. Factory overhead charged to work in process was 75% of direct labor cost and 27% of the
total manufacturing cost.
d. The beginning work in process inventory, January 1, was 40% of the ending work in
process inventory, December 31.
Required:
Prepare a statement of cost of goods manufactured for the year ended December 31 for FJW Manufacturing company.
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