The factory has one production department and uses the direct labor hour method to apply factory overhead. Three jobs are started during the month, and postings are made daily to the job cost sheets from the materials requisitions and labor-time records. The following schedule shows the jobs and amounts posted to the job cost sheets: Date Started Direct Direct Direct Labor Job Materials Labor Hours 2526 June 1 $ 5,000 $10,000 1,600 2527 June 12 10,000 15,000 1,900 .... 2528 June 15 4,000 7,000 1,300 $19,000 $32,000 4,800 The factory overhead control account was debited during the month for actual factory overhead expenses of $27,000. On June 11, Job 2526 was completed and delivered to the customer at a markup of 50% on manufacturing cost. On June 24, Job 2527 was completed and transferred to Finished Goods. On June 30, Job 2528 was still in process.
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.
Job cost sheets,
Planet Products, Inc., completed Job 2525 on May 31, and there were no jobs in process in the plant. Prior to June 1, the
predetermined
Estimated variable factory overhead . . . . . . . . . . . ......... $20,000
Estimated fixed factory overhead ........................................... 10,000
Total estimated factory overhead ......................................... $30,000
Estimated variable factory overhead per hour . . . . . . . . . .. . . $4
Estimated fixed factory overhead per hour ................................... 2
Predetermined overhead rate per direct labor hour . . . . ...... $6
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