ton Company manufactures custom guitars in a wide variety of styles. The following incomplete ledger accounts refer to transactions that are summarized for May: Materials May 1 Balance 34,900 May 31 Requisitions (a) 31 Purchases 140,400 Work in Process May 1 Balance
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.
Analyzing
Clapton Company manufactures custom guitars in a wide variety of styles. The following incomplete ledger accounts refer to transactions that are summarized for May:
| Materials | |||||
|---|---|---|---|---|---|
| May 1 | Balance | 34,900 | May 31 | Requisitions | (a) |
| 31 | Purchases | 140,400 |
| Work in Process | |||||
|---|---|---|---|---|---|
| May 1 | Balance | (b) | 31 | Completed jobs | (f) |
| 31 | Materials | (c) | |||
| 31 | Direct labor | (d) | |||
| 31 | Factory |
(e) |
| Finished Goods | |||||
|---|---|---|---|---|---|
| May 1 | Balance | 0 | May 31 | Cost of goods sold | (g) |
| 31 | Completed jobs | (f) |
| Wages Payable | |||||
|---|---|---|---|---|---|
| May 31 | Wages incurred | 111,300 | |||
| Factory Overhead | |||||
|---|---|---|---|---|---|
| May 1 | Balance | 20,300 | May 31 | Factory overhead applied | (e) |
| 31 | Indirect labor | (h) | |||
| 31 | Indirect materials | 18,700 | |||
| 31 | Other overhead | 56,600 |
In addition, the following information is available:
- Materials and direct labor were applied to the following jobs in May:
Job No. Style Quantity Direct Materials Direct Labor 101 AF1 200 $24,100 $15,000 102 AF3 370 39,160 23,000 103 AF2 210 16,670 8,000 104 VY1 260 41,340 26,000 105 VY2 150 21,200 14,000 106 AF4 110 6,850 3,000 Total 1,300 $149,320 $89,000 - Factory overhead is applied to each job at a rate of 130% of direct labor cost.
- The May 1 Work in Process balance consisted of two jobs, as follows:
Job No. Style Work in Process,
May 1101 AF1 $5,800 102 AF3 14,500 Total $20,300 - Customer jobs completed and units sold in May were as follows:
Job No. Style Completed in
MayUnits Sold
in May101 AF1 X 160 102 AF3 X 296 103 AF2 0 104 VY1 X 218 105 VY2 X 125 106 AF4 0
Required:
1. Determine the missing amounts associated with each letter and complete the following table. If required, round amounts to the nearest dollar. If an answer is zero, enter in "0". Enter all amounts as positive numbers.
| Job No. | Quantity | May 1 Work in Process |
Direct Materials |
Direct Labor |
Factory Overhead |
Total Cost | Unit Cost | Units Sold | Cost of Goods Sold | ||||||||
| No. 101 | fill in the blank 1 | $ 5,800 | $ 24,100 | $ 15,000 | $fill in the blank 2 | $fill in the blank 3 | $fill in the blank 4 | fill in the blank 5 | $fill in the blank 6 | ||||||||
| No. 102 | fill in the blank 7 | 14,500 | 39,160 | 23,000 | fill in the blank 8 | fill in the blank 9 | fill in the blank 10 | fill in the blank 11 | fill in the blank 12 | ||||||||
| No. 103 | fill in the blank 13 | 16,670 | 8,000 | fill in the blank 14 | fill in the blank 15 | fill in the blank 16 | fill in the blank 17 | ||||||||||
| No. 104 | fill in the blank 18 | 41,340 | 26,000 | fill in the blank 19 | fill in the blank 20 | fill in the blank 21 | fill in the blank 22 | fill in the blank 23 | |||||||||
| No. 105 | fill in the blank 24 | 21,200 | 14,000 | fill in the blank 25 | fill in the blank 26 | fill in the blank 27 | fill in the blank 28 | fill in the blank 29 | |||||||||
| No. 106 | fill in the blank 30 | 6,850 | 3,000 | fill in the blank 31 | fill in the blank 32 | fill in the blank 33 | fill in the blank 34 | ||||||||||
| Total | fill in the blank 35 | $20,300 | $149,320 | $89,000 | $fill in the blank 36 | $fill in the blank 37 | $fill in the blank 38 |
a. Materials Requisitions $fill in the blank 39
b. Work in Process Beginning Balance $fill in the blank 40
c. Direct Materials $fill in the blank 41
d. Direct Labor $fill in the blank 42
e. Factory overhead applied $fill in the blank 43
f. Completed jobs $fill in the blank 44
g. Cost of goods sold $fill in the blank 45
h. Indirect labor $fill in the blank 46
2. Determine the May 31 balances for each of the inventory accounts and factory overhead. Use the minus sign to indicate any credit balances.
| Materials | $fill in the blank 47 |
| Work in Process | $fill in the blank 48 |
| Finished Goods | $fill in the blank 49 |
| Factory Overhead | $fill in the blank 50 |
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