Job Order Costing To keep records of the actual cost of a special order job, a Job Order Cost System has been developed. Overhead is applied at the rate of 50% of the direct labor cost. Job Order Costing Section On January 1, 20x2, Division S began Job 2407 for the Client, THE BIG CHILDREN STORE. The ob called for 4,000 customized lamps. The following set of transactions occurred from January 5 until the job was completed: 5-Jan Purchased 4,225 Lamp Kits @ $16.65 per kit. 9-Jan 4,250 sets of Lamp Kits were requisitioned, including all those in the Beginning Inventory. 17-Jan Payroll of 570 Direct Labor Hours @ $9.75 per hour. 30-Jan Payroll of 620 Direct Labor Hours @ $10.00 per hour. 30-Jan 3,990 lamps were completed and shipped. All materials requisitioned were used or scrapped, and are a cost of normal processing. Month End Overhead Information Actual Variable Manufacturing Overhead Actual Fixed Manufacturing Overhead Cost of Direct Material Incurred in Manufacturing Job 2407 Cost of Direct Labor Incurred in Manufacturing Job 2407 Cost of Manufacturing Overhead Applied to Job 2407 $ 1,071.00 $ 39,623.45 Cost of manufacturing one lamp Round to two places, $##.## {13.01} {13.02} (13.03) {13.04)
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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