Required: 1. Prepare journal entries to record the costs incurred in both the Bending Department and the Drilling Department during May. Key your entries to the items (a) through (g) below. a. Raw materials were issued for use in production. b. Direct labor costs were incurred. c. Manufacturing overhead costs for the entire factory were incurred, $685,000. (Credit Accounts Payable.) d. Manufacturing overhead cost was applied to production using a predetermined overhead rate. e. Units that were complete as to processing in the Bending Department were transferred to eh Drilling Department, $1,536,990.
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.
![Required:
Compute the amount of overhead cost applied to each product during the year.
PROBLEM 4-17 Comprehensive Process Costing Problem - Weighted -Average
Method (LO1, LO2, L03, L04, LO5)
Techno Co. produces a special kind of tool that is widely used by construction. The tool
is produced in two processes: bending and drilling. Raw materials are introduced at
various points in the Bending Department; labor and overhead costs are incurred evenly
through the bending operation. The bent output is then transferred to the Drilling
Department.
The following incomplete Work in Process account has been provided for the
Bending Department for May:
Work in Process - Bending Department
May 1 inventory (12,000 units; materials 80%
complete; labor and overhead 60%
complete)
May costs dded:
Raw materials (270,000 units)
Direct labor
Overhead
May 31 inventory (9,000; materials
90% complete; labor
and overhead 60% complete)
45,369
394,210
638,144
493,584
Completed and transferred
To drilling (2 Units)
The May 1 work in process inventory in the Bending Department consists of the
following cost elements: raw materials, $13,385; direct labor, $18,880; and overhead,
$13,104. Costs incurred during May in the Drilling Department were: materials used,
$100,800; direct labor, $250,600; and overhead cost applied to production, $189,000.
The company accounts for units and costs using the weighted average method.
Required:
1. Prepare journal entries to record the costs incurred in both the Bending
Department and the Drilling Department during May. Key your entries to the
items (a) through (g) below.
a. Raw materials were issued for use in production.
b. Direct labor costs were incurred.
c. Manufacturing overhead costs for the entire factory were incurred,
$685,000. (Credit Accounts Payable.)
d. Manufacturing overhead cost was applied to production using a
predetermined overhead rate.
e. Units that were complete as to processing in the Bending Department were
transferred to eh Drilling Department, $1,536,990.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdef91cac-1b43-4a14-bc5d-22c24acf4ffa%2Fae9f19d8-52e7-4afa-9575-86bb5536cd49%2Ferfcyyc_processed.jpeg&w=3840&q=75)
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