Journal Entries, Cost of Ending Inventories Baxter Company has two processing departments: Assembly and Finishing. A predetermined overhead rate of $10 per DLH is used to assign overhead to production. The company experienced the following operating activity for April: Materials issued to Assembly, $25,000 Direct labor cost: Assembly, 500 hours at $9.20 per hour; Finishing, 400 hours at $7 per hour Overhead applied to production Goods transferred to Finishing, $33,400 Goods transferred to finished goods warehouse, $20,500 Actual overhead incurred, $10,000 Required: 1. Prepare the required journal entries for the preceding transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. a. b. c. d. e. f. 2. Assuming Assembly and Finishing have no beginning work-in-process inventories, determine the cost of each department's ending work-in-process inventories. Ending Inventory Work in Process—Assembly $ Work in Process—Finishing $
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.
Baxter Company has two processing departments: Assembly and Finishing. A predetermined
- Materials issued to Assembly, $25,000
- Direct labor cost: Assembly, 500 hours at $9.20 per hour; Finishing, 400 hours at $7 per hour
- Overhead applied to production
- Goods transferred to Finishing, $33,400
- Goods transferred to finished goods warehouse, $20,500
- Actual overhead incurred, $10,000
Required:
1. Prepare the required journal entries for the preceding transactions. For a compound transaction, if an amount box does not require an entry, leave it blank.
| a. | |||
| b. | |||
| c. | |||
| d. | |||
| e. | |||
| f. | |||
2. Assuming Assembly and Finishing have no beginning work-in-process inventories, determine the cost of each department's ending work-in-process inventories.
| Ending Inventory | |
| Work in Process—Assembly | $ |
| Work in Process—Finishing | $ |
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