Garcia, Incorporated, uses a job-order costing system for its products, which pass from the Machining Department, to the Assembly Department, to finished-goods inventory. The Machining Department is heavily automated; in contrast, the Assembly Department performs a number of manual-assembly activities. The company applies manufacturing overhead using machine hours in the Machining Department and direct-labor cost in the Assembly Department. The following information relates to the year just ended: Items Budgeted manufacturing overhead Actual manufacturing overhead Budgeted direct-labor cost (based on practical capacity) Actual direct-labor cost Budgeted machine hours (based on practical capacity) Actual machine hours The data that follow pertain to job number 775, the only job in production at year-end. Assembly Department Items Direct material Direct labor Machine hours Machining Department $ 25,500 $ 27,800 370 $ 6,700 $ 58,500 150 Machining Department $ 4,000,000 Selling and administrative expense amounted to $2,500,000. 4,280,000 1,500,000 1,450,000 400,000 425,000 Assembly Department $ 3,080,000 3,040,000 5,600,000 5,780,000 100,000 110,000
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.
Assuming the use of normal costing, determine the predetermined
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
