The WIP account given below relates to the activities of Jones Ltd for the month of April: April 1 15, 000 Direct Materials used 123,000 MAnufacturing labour costs incurred 163,500 (75% represents direct labour) Manufacturing overhead rate 120% of direct labour cost Manufacturing Overhead cost for April 165,150 Two jobs were completed with total costs of $183,000 and $105,000 respectively. They were sold on account at a mark-up of 50% on cost. After these transactions have been recorded, the balance in WIP inventory account at April 30 is:
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 WIP account given below relates to the activities of Jones Ltd for the month of April:
April 1 15, 000
Direct Materials used 123,000
Manufacturing
Manufacturing Overhead cost for April 165,150
Two jobs were completed with total costs of $183,000 and $105,000 respectively. They were sold on account at a mark-up of 50% on cost.
After these transactions have been recorded, the balance in WIP inventory account at April 30 is:
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