Rafael Company produces pipes for concert-quality organs. Each job is unique. In April 2022, it completed all outstanding orders, and then, in May 2022, it worked on only two jobs, M1 and M2: RAFAEL COMPANY, May 2022 Direct materials costs Direct manufacturing labor costs REQUIREMENTS: 1. Calculate the total cost for Job M1. Total cost for Job M1 Direct manufacturing labor is paid at the rate of $26 per hour. Manufacturing overhead costs are allocated at a budgeted rate of $ 20 per direct manufacturing labor- hour. Only Job M1 was completed in May. Job M1 Cost per pipe Job M2 $78,000 $51,000 $273,000 $208,000 2. 1,100 pipes were produced for Job M1. Calculate the cost per pipe. Ending WIP balance 3. Prepare the journal entry transferring Job M1 to finished goods. 4. What is the ending WIP balance for May 2022?
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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