Ivanhoe Manufacturing Company employs a job order cost system and keeps perpetual inventory records. The following transactions occurred in the first month of operations: 1. Direct materials requisitioned during the month: Job 101 $17,200 Job 102 13,760 Job 103 20,640 $51,600 2. Direct labor incurred and charged to jobs during the month was: Job 101 Job 102 $27,520 24,080 Job 103 17,200 3. 4. 5. $68,800 Manufacturing overhead was applied to jobs using a predetermined overhead rate based on 75% of direct labor costs. Actual manufacturing overhead costs incurred during the month amounted to $56,760. Job 101 consisting of 1,000 units and Job 103 consisting of 200 units were completed during the month. (a) Prepare journal entries to record the above transactions. (Credit account titles are automatically indented when the amount is entered.
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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