Piedmont Manufacturing produces metal products with the following standard quantity and cost information: Direct Material Aluminum 4 sheets @ $4 $16 Copper 3 sheets @ $8 24 Direct labor 7 hours @ $16 112 Variable overhead 5 machine hours @ $6 30 Fixed overhead 5 machine hours @ $4 20 Overhead rates were based on normal monthly capacity of 3,600 machine hours. During November, the company produced only 510 units because of a labor strike, which occurred during union contract negotiations. After the dispute was settled, the company scheduled overtime to try to meet regular production levels. The following costs were incurred in November: Material Aluminum 2,400 sheets purchased @ $3.80 Used 2,100 sheets Copper 1,800 sheets purchased @ $8.40 Used 1,560 sheets Direct Labor Regular time 3,120 hours @ $16 (pre-contract settlement) Regular time 540 hours @ $17 (post-contract settlement) Variable Overhead $13,980 (based on 2,505 machine hours) Fixed Overhead $11,310 (based on 2,505 machine hours) b. Prepare the journal entries to record the standard costing information for November.
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.
Comprehensive
Piedmont Manufacturing produces metal products with the following standard quantity and cost information:
| Direct Material | |||
| Aluminum | 4 | sheets @ $4 | $16 |
| Copper | 3 | sheets @ $8 | 24 |
| Direct labor | 7 | hours @ $16 | 112 |
| Variable |
5 | machine hours @ $6 | 30 |
| Fixed overhead | 5 | machine hours @ $4 | 20 |
Overhead rates were based on normal monthly capacity of 3,600 machine hours.
During November, the company produced only 510 units because of a labor strike, which occurred during union contract negotiations. After the dispute was settled, the company scheduled overtime to try to meet regular production levels. The following costs were incurred in November:
| Material | |||||
|---|---|---|---|---|---|
| Aluminum | 2,400 | sheets purchased @ $3.80 | Used | 2,100 | sheets |
| Copper | 1,800 | sheets purchased @ $8.40 | Used | 1,560 | sheets |
| Direct Labor | |||
|---|---|---|---|
| Regular time | 3,120 | hours @ $16 (pre-contract settlement) | |
| Regular time | 540 | hours @ $17 (post-contract settlement) |
| Variable Overhead | |||
|---|---|---|---|
| $13,980 | (based on | 2,505 | machine hours) |
| Fixed Overhead | |||
|---|---|---|---|
| $11,310 | (based on | 2,505 | machine hours) |
b. Prepare the
Note: Record any multiple debits or any multiple credits in alphabetical order by account name.
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