The following information is available for ADT Company, which produces special-order security products and uses a job order costing system. Overhead is applied using a predetermined overhead rate of 55% of direct labor cost. Inventories Beginning of period End of Period Raw materials $ 48,000 $ 37,000 Work in process 9,900 20,900 Finished goods 60,000 34,400 Cost incurred for the period Raw materials purchases $ 180,000 Factory payroll 150,000 Factory overhead (actual) Indirect materials used 16,000 Indirect labor used 34,500 Other overhead costs 95,500 Exercise 15-13 (Algo) Recording materials; direct and indirect LO P1, P3 Raw materials purchases for cash. Direct materials used. Indirect materials used. Prepare journal entries for the above transactions for the period
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.
The following information is available for ADT Company, which produces special-order security products and uses a
| Inventories | Beginning of period | End of Period |
|---|---|---|
| Raw materials | $ 48,000 | $ 37,000 |
| Work in process | 9,900 | 20,900 |
| Finished goods | 60,000 | 34,400 |
| Cost incurred for the period | |
| Raw materials purchases | $ 180,000 |
|---|---|
| Factory payroll | 150,000 |
| Factory overhead (actual) | |
| Indirect materials used | 16,000 |
| Indirect labor used | 34,500 |
| Other overhead costs | 95,500 |
Exercise 15-13 (Algo) Recording materials; direct and indirect LO P1, P3
- Raw materials purchases for cash.
- Direct materials used.
- Indirect materials used.
Prepare
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