Paramount Co. Uses Job Order costing system. The following transactions were performed during 20181) Raw material purchased on account $ 60,000.2) Material issued to factory $45,000 out of which 10,000 is indirect material.3) Direct labor cost incurred $55,000 and indirect labor cost $12,000.4) Factory overhead is applied was 56% on direct labor cost .5) Factory overhead cost incurred on account $50,000.6) Cost of jobs completed $178,000.7) Cost of jobs sold $190,000.Required: Prepare Journal Entries and T Account of Work in Process (WIP) , Factory Overhead (FOH),Raw Materials and Finished Goods *
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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