hours $4,320,000 in manufacturing overhead cost at an activity level of 576,000 machine-hours. used a cost formula to estimate that it would incur The company had no work in process at the beginning of the year. The company spent the entire month of January working on one large order-Job 382, which was an order for 8,000 machined parts. Cost data for January follow: а. Raw materials purchased on account, $315,000. b. a. Raw materials requisitioned for production, $270,000 (80% direct and 20% indirect). L abor cost incurred in the factory, $190,000, of which $80,000 was direct labor and $110,000 с. was indirect labor. 1 Depreciation recorded on factory equipment, $63,000. e. Other manufacturing overhead costs incurred, $85,000 (credit Accounts Payable). č Manufacturing overhead cost was applied to production on the basis of 40,000 machine-hours actually worked during January. The completed job was moved into the finished goods warehouse on January 31 to await delivery to the customer. (In computing the dollar amount for this entry, remember that the cost of a completed job consists of direct materials, direct labor, and applied overhead.) Required: Prepare journal entries to record items (a) through (f) above. Ignore item (g) for the moment.
hours $4,320,000 in manufacturing overhead cost at an activity level of 576,000 machine-hours. used a cost formula to estimate that it would incur The company had no work in process at the beginning of the year. The company spent the entire month of January working on one large order-Job 382, which was an order for 8,000 machined parts. Cost data for January follow: а. Raw materials purchased on account, $315,000. b. a. Raw materials requisitioned for production, $270,000 (80% direct and 20% indirect). L abor cost incurred in the factory, $190,000, of which $80,000 was direct labor and $110,000 с. was indirect labor. 1 Depreciation recorded on factory equipment, $63,000. e. Other manufacturing overhead costs incurred, $85,000 (credit Accounts Payable). č Manufacturing overhead cost was applied to production on the basis of 40,000 machine-hours actually worked during January. The completed job was moved into the finished goods warehouse on January 31 to await delivery to the customer. (In computing the dollar amount for this entry, remember that the cost of a completed job consists of direct materials, direct labor, and applied overhead.) Required: Prepare journal entries to record items (a) through (f) above. Ignore item (g) for the moment.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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Transcribed Image Text:hours
$4,320,000 in manufacturing overhead cost at an activity level of 576,000 machine-hours.
used a cost formula to estimate that it would incur
The company had no work in process at the beginning of the year. The company spent the
entire month of January working on one large order-Job 382, which was an order for 8,000
machined parts. Cost data for January follow:
а.
Raw materials purchased on account, $315,000.
b.
a. Raw materials requisitioned for production, $270,000 (80% direct and 20% indirect).
L abor cost incurred in the factory, $190,000, of which $80,000 was direct labor and $110,000
с.
was indirect labor.
1 Depreciation recorded on factory equipment, $63,000.
e.
Other manufacturing overhead costs incurred, $85,000 (credit Accounts Payable).
č Manufacturing overhead cost was applied to production on the basis of 40,000 machine-hours
actually worked during January.
The completed job was moved into the finished goods warehouse on January 31 to await
delivery to the customer. (In computing the dollar amount for this entry, remember that the
cost of a completed job consists of direct materials, direct labor, and applied overhead.)
Required:
Prepare journal entries to record items (a) through (f) above. Ignore item (g) for the moment.
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