Job Order Costing / Order Costing Method The following transactions occurred during the month of April for Kay Company. A. $3,000 worth of materials were purchased on credit. B. A total of $1,700 worth of materials was used in production, $500 for Job 443 and the remainder for Work 444. c. During the month, direct labor was 50 hours at Job 443 and 100 hours at Job 444. Direct labor was paid at a rate of $8 per hour. d. Overhead is charged using an overall factory rate of $7.5 per direct labor hour. e. The actual overhead for the month was $1,230 and was paid in cash. f. Work 443 completed and transferred to Finished Goods, g. The 442 jobs that were completed and transferred in not March are sold on credit at a price ($2,000) plus 25%. Requested: a. Prepare journal entries for transactions (a) to (e) b. Create order cost cards for Jobs 443 and 444. c. Prepare journal entries for transactions (f) and (g)
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.
Accounting
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