On August 1, Cairle Company's work-in-process inventory consisted of three jobs with the following costs: Job 70 Job 71 Job 72 Direct materials $1,500 $2,000 $850 Direct labor 1,900 1,200 900 Applied overhead 1,520 960 720 During August, four more jobs were started. Information on costs added to the seven jobs during the month is as follows: Job 70 Job 71 Job 72 Job 73 Job 74 Job 75 Job 76 Direct materials $800 $1,235 $3,600 $5,000 $300 $560 $80 Direct labor 1,000 1,400 2,200 1,800 600 850 180 Before the end of August, Jobs 70, 72, 73, and 75 were completed. On August 31, Jobs 72 and 75 were sold. Required: Calculate the predetermined overhead rate based on direct labor cost. fill in the blank 1% of direct labor cost. Calculate the ending balance for each job as of August 31. Ending Balance Job 70 $fill in the blank 2 Job 71 $fill in the blank 3 Job 72 $fill in the blank 4 Job 73 $fill in the blank 5 Job 74 $fill in the blank 6 Job 75 $fill in the blank 7 Job 76 $fill in the blank 8 Calculate the ending balance of Work in Process as of August 31. $fill in the blank 9 Calculate the cost of goods sold for August. $fill in the blank 10 Assuming that Cairle prices its jobs at cost plus 15 percent, calculate Cairle's sales revenue for August. $fill in the blank 11
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.
On August 1, Cairle Company's work-in-process inventory consisted of three jobs with the following costs:
|
Job 70 |
Job 71 |
Job 72 |
|
|
Direct materials |
$1,500 |
$2,000 |
$850 |
|
Direct labor |
1,900 |
1,200 |
900 |
|
Applied |
1,520 |
960 |
720 |
During August, four more jobs were started. Information on costs added to the seven jobs during the month is as follows:
|
Job 70 |
Job 71 |
Job 72 |
Job 73 |
Job 74 |
Job 75 |
Job 76 |
|
|
Direct materials |
$800 |
$1,235 |
$3,600 |
$5,000 |
$300 |
$560 |
$80 |
|
Direct labor |
1,000 |
1,400 |
2,200 |
1,800 |
600 |
850 |
180 |
Before the end of August, Jobs 70, 72, 73, and 75 were completed. On August 31, Jobs 72 and 75 were sold.
Required:
- Calculate the predetermined overhead rate based on direct labor cost.
fill in the blank 1% of direct labor cost. - Calculate the ending balance for each job as of August 31.
|
|
Ending Balance |
|
Job 70 |
$fill in the blank 2 |
|
Job 71 |
$fill in the blank 3 |
|
Job 72 |
$fill in the blank 4 |
|
Job 73 |
$fill in the blank 5 |
|
Job 74 |
$fill in the blank 6 |
|
Job 75 |
$fill in the blank 7 |
|
Job 76 |
$fill in the blank 8 |
- Calculate the ending balance of Work in Process as of August 31.
$fill in the blank 9 - Calculate the cost of goods sold for August.
$fill in the blank 10 - Assuming that Cairle prices its jobs at cost plus 15 percent, calculate Cairle's sales revenue for August.
$fill in the blank 11
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