In October, Temptations Event Planners (TEP) planned events for two clients. TEP worked 164 hours for Ward Corporation and 264 hours for Girardin Industries. TEP bills clients at the rate of $470 per hour; labor cost for its planning staff is $260 per hour. The total number of hours worked in October was 428, and overhead costs were $16,800. Overhead is applied to clients at $32 per planner-hour. In addition, TEP had $33,000 in marketing and administrative costs. All transactions are on account. All services were billed. Transaction Description (a) Record labor cost (b) Record applied service overhead Record cost of (c) services billed Record actual service (d) overhead Required:
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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