Stock Co. uses a job costing system. The following debits (credits) appeared in Stock's work-in-process account for the month of April: April Description Amount 1 Balance $ 4,000 30 Direct materials 24,000 30 Direct labor 16,000 30 Factory overhead 12,800 30 To finished goods (48,000 )Stock applies overhead to production at a predetermined rate of 80% of direct labor cost. Job No. 5, the only job still in process on April 30 has been charged with direct labor of $2,000. What was the amount of direct materials charged to Job No. 5? (CPA adapted) A $24,000. B $3,000. C $8,800. D $5,200.
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.
| April | Description | Amount | |||
| 1 | Balance | $ | 4,000 | ||
| 30 | Direct materials | 24,000 | |||
| 30 | Direct labor | 16,000 | |||
| 30 | Factory |
12,800 | |||
| 30 | To finished goods | (48,000 | ) |
| A |
$24,000.
|
|
| B |
$3,000.
|
|
| C |
$8,800.
|
|
| D |
$5,200.
|
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
