Venus International makes customized furniture and uses job order costing. During a period, its beginning raw materials inventory was $10,000. It purchased raw materials of $20,000 and ended the period with ending raw materials inventory of $3,000. What is the cost of raw materials transferred to Work in Process Inventory? $27,000 $33,000 $30,000 $20,000 Knowledge Check 03 Smith and Stein Inc. is a jeweler specialized in making exclusive designs for its customers. Its unadjusted cost of goods sold in a period is $150,000 and the period's sales revenue is $225,000. If the underapplied manufacturing overhead is $5,000, calculate the gross profit.
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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We discuss how to prepare the cost of goods manufactured report
and the income statement. The cost of goods manufactured report
shows the cost of goods manufactured, which is used in the
income statement to compute cost of goods sold, which is used to
calculate net operating income.
Knowledge Check 02
Venus International makes customized furniture and uses
a period, its beginning raw materials inventory was $10,000. It purchased raw
materials of $20,000 and ended the period with ending raw materials inventory of
$3,000. What is the cost of raw materials transferred to Work in Process Inventory?
$27,000
$33,000
$30,000
$20,000
Knowledge Check 03
Smith and Stein Inc. is a jeweler specialized in making exclusive designs for its
customers. Its unadjusted cost of goods sold in a period is $150,000 and the
period's sales revenue is $225,000. If the underapplied manufacturing overhead is
$5,000, calculate the gross profit.
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