Munson Co. uses a job order cost system. The following data summarize the operations related to production for July:a. Materials purchased on account, $225,750b. Materials requisitioned, $217,600, of which $17,600 was for general factory usec. Factory labor used, $680,000, of which $72,300 was indirectd. Other costs incurred on account for factory overhead, $330,000; selling expenses, $180,000; and administrative expenses, $126,000e. Prepaid expenses expired for factory overhead, $27,500; for selling expenses, $8,100; and for administrative expenses, $5,250f. Depreciation of office building was $44,500; of office equipment, $16,800; and of factory equipment, $55,100g. Factory overhead costs applied to jobs, $548,000h. Jobs completed, $1,140,000i. Cost of goods sold, $1,128,000InstructionsJournalize the entries to record the 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.
Munson Co. uses a
a. Materials purchased on account, $225,750
b. Materials requisitioned, $217,600, of which $17,600 was for general factory use
c. Factory labor used, $680,000, of which $72,300 was indirect
d. Other costs incurred on account for factory
e. Prepaid expenses expired for factory overhead, $27,500; for selling expenses, $8,100; and for administrative expenses, $5,250
f.
g.
h. Jobs completed, $1,140,000
i. Cost of goods sold, $1,128,000
Instructions
Journalize the entries to record the summarized operations.
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