Problem 4-49 Application of Overhead; Cost Flows Haughton Company uses a job costing system for its production costs and a predetermined factory overhead rate based on direct labor costs to apply factory overhead to all jobs. During the month of July, the firm processed three jobs: X13, X14, and X15, of which X13 was started in June. Data July 1 $36,500 $41,000 $0 Inventories July 31 Direct Materials Work in Process Finished Goods $0 Cost of Goods Sold, July Direct Materials Purchas ed, July $55,000 Labor hours Job X13 Job X14 Job X15 Indirect labor Total Materials $16,380 $24,220 $14,000 used 3,500 2,800 1,600 6.900 $444.000 Status Completed In processing In processing $54,600 Other factory overhead costs: Rent Utility Repairs and maintenance Depreciation Other $131,500 $180,600 $188,500 $131, 100 $56.000 $687,700 Applied Overhead $900,600
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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