The following information is for Punta Company for July a. Factory overhead costs were applied to jobs at the predetermined rate of $50.00 per labor hour. Job Sincurred 6,250 labor hours; Job T used 4,350 labor hours. b. Job S was shipped to customers during July. c. Job T was still in process at the end of July. d. The overapplied or underapplied overhead to the Cost of Goods Sold account was closed at the end of July. e. Factory utilities, factory depreciation, and factory insurance incurred are summarized as follows: $ 16,500 48,750 19,500 $ 84,750 Utilities Depreciation Insurance Total f Direct materials and indirect materials used are as follows: Job T Total Material A $75,000 $107,250 37,250 53,500 Material a Subtotal $112,250 $ 158,750 214,750 Indirect materials Total $373,500 g. Direct labor incurred for the two jobs and indirect labor are as follows: Job S $32,250 14,250 $46,500
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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The following information is for Punta Company for July:
a. Factory overhead costs were applied to jobs at the predetermined rate of $50.00 per labor hour. Job Sincurred 6,250 labor hours;
Job T used 4,350 labor hours.
b. Job S was shipped to customers during July.
c. Job T was still in process at the end of July.
d. The overapplied or underapplied overhead to the Cost of Goods Sold account was closed at the end of July.
e. Factory utilities, factory depreciation, and factory insurance incurred are summarized as follows:
"
Utilities
Depreciation
Insurance
Total
f. Direct materials and indirect materials used are as follows:
$ 16,500
48,750
Job
Job T
Indirect labor
Total
$
19,500
84,750
Job S
$ 32,250
Job T
$75,000
37,250
14,250
$46,500 $ 112,250
Total
107,250
$
51,500
158,750
214,750
$373,500
Material A
Material B
Subtotal
Indirect materials
Total
g. Direct labor incurred for the two jobs and indirect labor are as follows:
$ 63,000
52,500
148,000
$263,500
Required:
1. Calculate the total manufacturing cost for Job S and Job T for July. (Round your intermediate calculations and final answers to 2
decimal places.)
2. Calculate the amount of overapplied or underapplied overhead and state whether the Cost of Goods Sold account will be increased
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![Total
Required:
1. Calculate the total manufacturing cost for Job S and Job T for July. (Round your intermediate calculations and final answers to 2
decimal places.)
2. Calculate the amount of overapplied or underapplied overhead and state whether the Cost of Goods Sold account will be increased
or decreased by the adjustment.
1. Total manufacturing costs - Job S
Total manufacturing costs - Job T
2.
$ 263,500
Cost of goods sold
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