Job order cost; journal entries; profit analysis Spokane Manufacturing Co. obtained the following information from its records for the month of July: Jobs Completed and Sold 230 320 560 Direct materials cost . . . . . . . . . . . . . . . . . . $ 25,000 $ 15,000 $ 29,000 Direct labor cost ...................... 70,000 60,000 55,000 Factory overhead . . . . . ................ 50,000 40,000 63,000 Units manufactured . . . . . . . . . . . . . . . . . . . 10,000 5,000 14,000 Selling price .......................... 152,000 120,000 175,250 Required: 1. Prepare, in summary form, the journal entries that would have been made during the month to record the distribution of materials, labor, and overhead costs; the completion of the jobs; and the sale of the jobs. 2. Prepare schedules showing the gross profit or loss for July for the following: a. The business as a whole. b. Each job completed and sold. c. Each unit manufactured and sold. (Round to the nearest cent.)
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.
Spokane Manufacturing Co. obtained the following information
from its records for the month of July: Jobs Completed and Sold
230 320 560
Direct materials cost . . . . . . . . . . . . . . . . . . $ 25,000 $ 15,000 $ 29,000
Direct labor cost ...................... 70,000 60,000 55,000
Factory
Units manufactured . . . . . . . . . . . . . . . . . . . 10,000 5,000 14,000
Selling price .......................... 152,000 120,000 175,250
Required:
1. Prepare, in summary form, the journal entries that would
have been made during the month to record the distribution
of materials, labor, and overhead costs; the completion of the
jobs; and the sale of the jobs.
2. Prepare schedules showing the gross profit or loss for July
for the following:
a. The business as a whole.
b. Each job completed and sold.
c. Each unit manufactured and sold. (Round to the nearest
cent.)
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