Manufacturing operations for July are summarized as follows: a. Materials purchased on account $149,800 b. Materials requisitioned for use: Phosphate-Making Department Packaging-Packing Department Indirect materials-Making Department. Indirect materials-Packing Department. $105,700 31,300 4,980 1,530 c. Labor used: Direct labor-Making Department . Direct labor-Packing Department. Indirect labor-Making Department.. Indirect labor-Packing Department $ 32,400 40,900 15,400 18,300 d. Depreciation charged on fixed assets: Making Department.... Packing Department $ 10,700 7,900 e. Expired prepaid factory insurance: Making Department... Packing Department . $ 2,000 1,500 f. Applied factory overhead: Making Department... Packing Department $ 32,570 30,050 g. Production costs transferred from Making Department to Packing Department . $166,790 .... h. Production costs transferred from Packing Department to Finished Goods.. $263,400 i. Cost of goods sold during the period ...... $265,200
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.
Preston & Grover Soap Company manufactures powdered detergent. Phosphate is placed in process in the Making Department, where it is turned into granulars. The output of Making is transferred to the Packing Department, where packaging is added at the beginning of the process. On July 1, Preston & Grover Soap Company had the following inventories:
Finished Goods $13,500
Work in Process—Making 6,790
Work in Process—Packing 7,350
Materials 5,100
Departmental accounts are maintained for factory overhead, which both have zero balances on July 1.
Attachment
Instructions
1.
2. Compute the July 31 balances of the inventory accounts.
3. Compute the July 31 balances of the factory overhead accounts.
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