Under Lamar Company's job costing system, manufacturing overhead is applied to Work-in-Process Inventory using a predetermined overhead rate. During June, Lamar's transactions included the following: Direct materials issued to production $ 91,700 Indirect materials issued to production 9,700 Manufacturing overhead cost incurred 126,700 Manufacturing overhead cost applied 114,700 Direct labor cost incurred 108,700 Lamar Company had no beginning or ending inventories. What was the cost of goods manufactured for June? (CMA adapted)
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.
Under Lamar Company's
| Direct materials issued to production | $ 91,700 |
|---|---|
| Indirect materials issued to production | 9,700 |
| 126,700 | |
| Manufacturing overhead cost applied | 114,700 |
| Direct labor cost incurred | 108,700 |
Lamar Company had no beginning or ending inventories. What was the cost of goods manufactured for June? (CMA adapted)
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