Pinacle Company produced 80,000 machine parts for diesel engines. There were no beginning or ending work-in-process inventories in any department. Pinacle incurred the following costs for June: Mixing Department Tableting Department Bottling Department Direct materials $25,000 $5,000 $5,500 Direct labor 10,000 7,200 10,000 Applied overhead 15,000 12,000 13,000 Required: 1. Calculate the costs transferred out of each department. 2. Prepare the journal entries corresponding to these transfers.
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.
Pinacle Company produced 80,000 machine parts for diesel engines. There were no beginning or ending work-in-process inventories in any department. Pinacle incurred the following costs for June:
|
|
Mixing Department |
Tableting Department |
Bottling Department |
|
Direct materials |
$25,000 |
$5,000 |
$5,500 |
|
Direct labor |
10,000 |
7,200 |
10,000 |
|
Applied |
15,000 |
12,000 |
13,000 |
Required:
1. Calculate the costs transferred out of each department.
2. Prepare the
Provide all the working outs, do not just write the final answers. Use the template given to write the journal entries
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