XYZ company uses a job order cost system. The following data summarize the operations related to production in July. Assume $0 starting balances. 1. Materials purchased for cash, $700,000 2. Materials requisitioned and factory labor used: Job Materials 601 $35, 100 602 $35,000 603 $35,050 604 $62,500 For General Factory Use $7,600 Factory Labor $25,000 $39,500 $15,700 $40,000 $35,000 3. Factory overhead costs incurred on account $30,000 4. Depreciation of machinery and equipment $20,000 5. The predetermined factory overhead rate is $27.00 per machine hour. Machine hours used are: Job 601: 230 MH 602: 250 MH 603: 185 MH 604: 280 MH 6. Jobs completed are 601, 602, 603 7. Jobs were shipped and customers were billed as follows: 601: $500,000 602: $480,000 REQUIRED: Joumalize the required entries to record the above summarized operations.
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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