Required: Oscar Corporation applies manufacturing overhead to production at 150% of direct labor cost. During the year ended 20xx, manufacturing overhead of $180,000 was applied to production; actual manufacturing overhead was $199,000. Beginning Work in Process Inventory was $20,000, and ending Work in Process Inventory was $24,000. Beginning Finished Goods Inventory was $42,000, and ending Finished Goods Inventory was $39,000. Sales for the year were $580,000, yielding a $117,000 gross profit. Complete the following schedule: (Hint: First determine adjusted cost of goods sold from the income statement data and work backward.) Item Direct materials used in production Direct labor Manufacturing overhead applied Total current manufacturing costs + Beginning work in process inventory -Ending work in process inventory Cost of goods manufactured + Beginning finished goods inventory - Ending finished goods inventory Unadjusted cost of goods sold Underapplied overhead adjustment Adjusted cost of goods sold Amount
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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