Materials May 1 Balance 31 Purchases 105,600 May 31 Requisitions 500,000 Work in Process May 1 Balance 31 Materials 31 Direct labor (b) May 31 Completed jobs (c) (d) 31 Factory overhead applied (e) Finished Goods May 1 Balance 31 Completed jobs O May 31 Cost of goods sold (f) Wages Payable |May 31 Wages incurred 396,000 Factory Overhead May 1 Balance 31 Indirect labor 26,400 May 31 Factory overhead applied lel (h) 15,400 31 Indirect materials 31 Other overhead 122,500 Job No. May 1 Work in Process Direct Materials Direct Labor Factory Overhead Total Cost Unit Cost Units Sold Cost of Goods Sold Quantity
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.
Analyzing manugacturing cost accounts
Claptom Company manufactures custom guitars in a wide varity of styles. The following incomplete ledger accounts refer to transactions that are summarized for May:
In addition, the following information is available :
a. Materials and direct labor were applied to the following jobs in May:
| Job No. | Style | Quantity | Direct materials | Direct Labor |
| 101 | AF1 | 330 | $82500 | 59400 |
| 102 | AF3 | 380 | 105400 | 72600 |
|
103 |
AF2 | 500 | 132000 | 110000 |
| 104 | VY1 | 400 | 66000 | 39600 |
| 105 | VY2 | 660 | 118800 | 66000 |
| 106 | AF4 | 330 | 66000 | 30800 |
| TOTAL | 2600 | 570700 | $378400 |
b) Factory
c) The may 1 Work in process balance consisted of two jobs as follows
| Job No. | Style | Work in process May 1 |
| 101 | AF1 | $26,400 |
| 102 | AF3 | 46,400 |
| Total | $72,400 |
d) Customer jobs completed and units sold in May were as follows:
| Job No. | Style | Completed in May | Units Sold in May |
| 101 | AF1 | X | 264 |
| 102 | AF3 | X | 360 |
| 103 | AF2 | 0 | |
| 104 | VY1 | X | 384 |
| 105 |
VY2 |
X | 530 |
| 106 | AF4 | 0 |
Instructions
1 Determine the missing amounts associated with each letter. Provide supporting calculations by completing a table with the following headings
2. Determine the may 31 balances for each of the inventory accounts and factory overhead.
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