Preparing journal entries—outputs Hartley Company has a production process that involves three processes. Units move through the processes in this order: cutting, stamping and then polishing. The company had the following transactions in November: Cost of units completed in the Cutting Department, $17,000 Cost of units completed in the Stamping Department, $30,000 Cost of units completed in the Polishing Department, $35,000 Sales on account, $50,000 Cost of goods sold is 80% of sales Prepare the journal entries for Hartley Company.
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.
Preparing
Hartley Company has a production process that involves three processes. Units move through the processes in this order: cutting, stamping and then polishing. The company had the following transactions in November:
- Cost of units completed in the Cutting Department, $17,000
- Cost of units completed in the Stamping Department, $30,000
- Cost of units completed in the Polishing Department, $35,000
- Sales on account, $50,000
- Cost of goods sold is 80% of sales
Prepare the journal entries for Hartley Company.
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