Johnson incorporated is a job-order manufacturing company that uses a predetermined overhead rate based apply overhead to individual jobs. For the current year, estimated direct labor hours are 87,000 and estimated $609,000. The following information is for September of the current year. Job A was completed during Septe started but not finished. September 1, inventories Materials inventory Work-in-process inventory (All Job A) Finished goods inventory Material purchases Direct materials requisitioned Job A Job B Direct labor hours Job A Job B Labor costs incurred Direct labor ($9.00/hour) Indirect labor Supervisory salaries Rental costs Factory $ 7,800 31,800 68,500 108,500 68,000 35,000 4,500 3,800 74,700 13,800 6,300 7,300
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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