Using the 7-Steps for Assigning Costs, compute total manufacturing costs for Job 423. The company uses normal costing. Clearly label and explain each step. Show all calculations (if using excel, cell referencing and formulas is acceptable).
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.
- Spartans Spears make fine handcrafted wooden spears. Each spear is customized to the specifications of the client and each client order is recorded as a “job”. Below is information pertaining to Job 423:
Job 423 – Custom pine arrowhead spear Company-Wide
Direct Materials $15.00 Total Direct Materials $48,650
Direct Labor $23.00 Total Direct Labor $125,400
Actual DL Hours 1.80 Estimated MOH $138,000
Actual MOH $124,000
Est. Total DL Hours 5,450
Actual Total DL Hours 5,760
Using the 7-Steps for Assigning Costs, compute total
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