Job Order Costing for a Service Company The law firm of Prawitt and Bradford accumulates costs associated with individual cases, using job order costing. The following transactions occurred during August: Date Transaction August 3. Charged 410 hours of professional (lawyer) time to the Shadow Creek Co. breech of contract suit to prepare for the trial, at a rate of $180 per hour. 10. Reimbursed travel costs to employees for depositions related to the Shadow Creek case, $16,600. 14. Charged 240 hours of professional time for the Shadow Creek trial at a rate of $290 per hour. 18. Received invoice from consultants Westerly and Henninger for $55,100 for expert testimony related to the Shadow Creek trial. 27. Applied office overhead at a rate of $80 per professional hour charged to the Shadow Creek case. 31. Paid administrative and support salaries of $36,900 for the month
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.
Step by step
Solved in 4 steps
