Sierra Company manufactures soccer balls in two sequential processes: Cutting and Stitching. All direct materials enter production at the beginning of the cutting process. The following information is available regarding its May inventories. Direct materials Raw materials purchased on credit Direct materials used-Cutting Direct materials used-Stitching Raw materials inventory Work in process inventory-Cutting Work in process inventory-Stitching Finished goods inventory The following additional information describes the company's production activities for May. Direct labor Direct labor-Cutting Direct labor-Stitching $ 17,100 68,400 Beginning Inventory $ 21,000 73,500 93,300 26,100 Factory Overhead (Actual costs) Indirect materials used Indirect labor used Other overhead costs $ 40,000 22,500 0 Ending Inventory $ 24,100 $ 14,400 55,600 50,000 75,500 69,800 14,250
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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Problem 20-5A (Algo) Production cost flow and measurement; journal entries LO P3, P4
[The following information applies to the questions displayed below.]
Sierra Company manufactures soccer balls in two sequential processes: Cutting and Stitching. All direct
materials enter production at the beginning of the cutting process. The following information is available
regarding its May inventories.
Direct materials
Raw materials purchased on credit
Direct materials used-Cutting
Direct materials used-Stitching
Raw materials inventory.
75,500
Work in process inventory-Cutting
Work in process inventory-Stitching
Finished goods inventory.
69,800
14,250
The following additional information describes the company's production activities for May.
Direct labor
Direct labor-Cutting
Direct labor-Stitching
$17,100
68,400
Factory Overhead (Actual costs)
Indirect materials used
Indirect labor used.
Other overhead costs:
Beginning
Inventory
$ 21,000
73,500
93,300
26,100
$ 40,000
22,500
0
Ending
Inventory.
$ 24,100
$ 14,400
55,600
50,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd4fb3069-3205-4768-a97a-1b3924eeeda6%2Fe00ed15b-6dab-46be-aca7-62bc2c24898a%2F1wvxoh8_processed.jpeg&w=3840&q=75)
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