The WildSide Company modifies production motorcycles for superbike racing to customer order. It operates a job costing system. The following information is available for the month of June 20X3: Purchases during June: Direct material $30,000 Direct labour costs incurred during June: 20,400 (i.e. $40 per hour * 510 hours). Manufacturing overhead is applied based on a rate $1.5 per direct labour dollar. Other costs incurred during June: Manufacturing supplies inventory issued $6,000 Indirect labour cost $3,500 Depreciation of manufacturing equipment $12,000 Electricity-Factory S8,500 Jobs costing S64,500 were sold at the price of $76,400 on credit at the end of June. Required: Complete the T- accounts providing the amounts of a) to p) to show the flow of costs through the company's manufacturing accounts. Raw materials inventory Work in process inventory OB $30,000 b) OB $46,250 a) c) d) e) CGM 53,250 f) СВ 71,500 Finished goods inventory Cost goods sold O/B $34,500 h) i) j) g) CB 23,250 Manufacturing overhead k) p) 1) m) o) Note: OB denotes opening balance on 1 June. CB denotes closing balance on 30 June. CGM denotes costs of goods manufactured.
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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