new company started production. Job 1 was completed, and Job 2 remains in production. Here is the information from the job cost sheets from their first and only jobs so far: Job 1 Hours Total Cost Direct materials $375 Direct labor 231 5,313 Manufacturing Overhead 4,620 _____ Total cost $10,308 Job 2 Hours Total Cost Direct materials $405 Direct labor 85 1,955 Manufacturing Overhead 1,700
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.
5. A new company started production. Job 1 was completed, and Job 2 remains in production. Here is the information from the
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Job 1 Hours Total Cost Direct materials $375 Direct labor 231 5,313 Manufacturing _____ Total cost $10,308 |
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Job 2 Hours Total Cost Direct materials $405 Direct labor 85 1,955 Manufacturing Overhead 1,700 ______ Direct materials $4,060 |
PLEASE NOTE #1: Account balances will be rounded to whole dollars and shown with "$" and commas as needed ($1,234). You will respond with a "DR" or "CR" - capital letters and no quotes.
PLEASE NOTE #2: The predetermined overhead rate will be rounded to two decimal places and shown with "$" and commas as needed (i.e. $12,345.67). The rate does NOT require their proper label.
Using the information provided,
- What is the balance in the work in process inventory? Is the balance a DR or a CR?
- What is the balance in the finished goods inventory? Is the balance a DR or a CR?
- If manufacturing overhead is applied on the basis of direct labor hours, what is the predetermined overhead rate? .
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