Letena Company had only one job in process on July 1. The job had been charged with $1,000 of direct materials, $3,302 of direct labor and $5,382 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $23.10 per labor-hour. During July, the following information on Letena's activities was recorded: Raw Materials: Beginning Balance $6,100 Purchased $70,000 Used in Production $69,600 Labor: Direct labor-hours worked during July 1,160 Direct labor cost incurred $15,400 Other information: Actual Manufacturing overhead incurred: $29,002 Work-in-Process Inventory, July 31: $13,200 Work-in-Process inventory on July 31 contains $2,921 of direct labor cost. The entry to dispose of the underapplied or overapplied manufacturing overhead for July would include a debit or credit of BLANK to the account Manufacturing Overhead.
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.
Letena Company had only one job in process on July 1. The job had been charged with $1,000 of direct materials, $3,302 of direct labor and $5,382 of
| Raw Materials: | |
| Beginning Balance | $6,100 |
| Purchased | $70,000 |
| Used in Production | $69,600 |
| Labor: | |
| Direct labor-hours worked during July | 1,160 |
| Direct labor cost incurred | $15,400 |
| Other information: | |
| Actual Manufacturing overhead incurred: | $29,002 |
| Work-in-Process Inventory, July 31: | $13,200 |
Work-in-Process inventory on July 31 contains $2,921 of direct labor cost.
The entry to dispose of the underapplied or overapplied manufacturing overhead for July would include a debit or credit of BLANK to the account Manufacturing Overhead.
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