Zelda Manufacturing organized in June and recorded the following transactions during its first month of operations Purchased materials costing $800,000. Used direct materials in production costing $485,000. Applied direct labor costs of $500,000 to various jobs. Applied manufacturing overhead at a rate of $10 per direct labor hour. (Direct labor workers earn $20 per hour.) Incurred actual manufacturing overhead costs of $245,000 (credit “Various Accounts”). Transferred completed jobs costing $745,000 to finished goods. Sold completed jobs for $1,000,000 on account. The cost applied to the jobs sold totaled $615,000. Closed the Manufacturing Overhead account directly to Cost of Goods Sold on June 30. a.Prepare a journal entry for each of the eight transactions listed above. b. Compute the balance of the Cost of Goods Sold account at June 30. c. Determine the company's inventory balances at the end of June.
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.
Zelda Manufacturing organized in June and recorded the following transactions during its first month of operations
-
Purchased materials costing $800,000.
-
Used direct materials in production costing $485,000.
-
Applied direct labor costs of $500,000 to various jobs.
-
Applied manufacturing
overhead at a rate of $10 per direct labor hour. (Direct labor workers earn $20 per hour.) -
Incurred actual
manufacturing overhead costs of $245,000 (credit “Various Accounts”). -
Transferred completed
jobs costing $745,000 to finished goods. -
Sold completed jobs for $1,000,000 on account. The cost applied to the jobs sold totaled $615,000.
-
Closed the Manufacturing Overhead account directly to Cost of Goods Sold on June 30.
a.Prepare a
b. Compute the balance of the Cost of Goods Sold account at June 30.
c. Determine the company's inventory balances at the end of June.
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