Schrager Company has two production departments: Cutting and Assembly. July 1 inventories are Raw Materials $5,100, Work in Process—Cutting $3,600, Work in Process—Assembly $10,800, and Finished Goods $32,400. During July, the following transactions occurred. 1. Purchased $63,200 of raw materials on account. 2. Incurred $62,100 of factory labor. (Credit Wages Payable.) 3. Incurred $73,000 of manufacturing overhead; $42,000 was paid and the remainder is unpaid. 4. Requisitioned materials for Cutting $16,800 and Assembly $9,900. 5. Used factory labor for Cutting $34,700 and Assembly $27,400. 6. Applied overhead at the rate of $21 per machine hour. Machine hours were Cutting 1,720 and Assembly 1,770. 7. Transferred goods costing $68,870 from the Cutting Department to the Assembly Department. 8. Transferred goods costing $135,000 from Assembly to Finished Goods. 9. Sold goods costing $151,300 for $201,100 on account
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.
Schrager Company has two production departments: Cutting and Assembly. July 1 inventories are Raw Materials $5,100, Work in Process—Cutting $3,600, Work in Process—Assembly $10,800, and Finished Goods $32,400. During July, the following transactions occurred.
| 1. | Purchased $63,200 of raw materials on account. | |
| 2. | Incurred $62,100 of factory labor. (Credit Wages Payable.) | |
| 3. | Incurred $73,000 of manufacturing |
|
| 4. | Requisitioned materials for Cutting $16,800 and Assembly $9,900. | |
| 5. | Used factory labor for Cutting $34,700 and Assembly $27,400. | |
| 6. | Applied overhead at the rate of $21 per machine hour. Machine hours were Cutting 1,720 and Assembly 1,770. | |
| 7. | Transferred goods costing $68,870 from the Cutting Department to the Assembly Department. | |
| 8. | Transferred goods costing $135,000 from Assembly to Finished Goods. | |
| 9. | Sold goods costing $151,300 for $201,100 on account |
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