OBJ. 2 EX 19-7 Entries for direct labor and factory overhead Townsend Industries Inc. manufactures recreational vehicles. Townsend uses a job order cost system. The time tickets from November jobs are summarized as follows: Job 201 Job 202 p Job 203 Job 204 Factory supervision $6,240 7,000 5,210 6,750 4,000 Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $18 per direct labor hour. The direct labor rate is $40 per hour. a. Journalize the entry to record the factory labor costs. b. Journalize the entry to apply factory overhead to production for November. EX 19-8 Factory overhead rates, entries, and account balance
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.
19-7
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