Matt, Inc., a toy manufacturing company uses job order cost system. The time tickets from September jobs are summarized below. Job 100 $3,500 Job 101 1,800 Job 102 1,200 Job 103 2,800 Factory supervision 1,700 Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $25 per direct labor hour. The direct labor rate is $30 per hour. a. Determine the total factory labor costs transferred to Work in Process and Factory Overhead for September. Costs transferred to Work in Process Costs transferred to Factory Overhead b. Determine the amount of factory overhead applied to production for September.
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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