Widmer Watercraft's predetermined overhead rate for year 2013 is 200% of direct labor. Information on the company's production activities during May 2013 follows. a. Purchased raw materials on credit, $ 220,000, b. Paid $128,500 cash for factory wages, c. Paid $15, 250 cash to a computer consultant to reprogram factory equipment. d. Materials requisitions record use of the following materials for the month. Job 136 $ 49,000 Job 137 32,500 Job 138 19,400 Job 139 23,200 Job 140 6,400 Total direct materials 130,500 Indirect materials 21,000 Total materials used $151,500 e. Time tickets record use of the following labor for the month, Job 136 $ 12,100 Job 137 10,500 Job 138 37,700 Job 139 39,600 Job 140 3,400 Total direct labor 103,300 Indirect labor 25, 500 Total $ 128,800 f. Applied overhead to Jobs 136, 138, and 139. g Transferred Jobs 136, 138, and 139 to Finished Goods. h. Sold Jobs 136 and 138 on credit at a total price of 5540,000. i. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance). Depreciation of factory building $ 70,000 Depreciation of factory equipment 38,000 Expired factory insurance 11,000 Accrued property taxes payable 35,500 j Applied overhead at month-end to the Goods in Process (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost. 4. Prepare a report showing the total cost of each job in process and prove that the sum of their costs equals the Goods in Process Inventory account balance. Prepare similar reports for Finished Goods Inventory and Cost of Goods Sold.
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.
Widmer Watercraft's predetermined
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