Concept explainers
Videos
1)
Introduction:
• Job Costing is a method of cost allocation and calculation used when the types of goods produced are specific in nature.
• The cost allocation is done for all products on basis of a specific cost estimate which is calculated by dividing the total costs for each process by the number of units produced.
• Job costing facilitates cost allocation in a simplistic manner based on the costs incurred specifically for certain units produced
Cost allocation of Overheads
• Cost allocation of Overheads takes place on basis of cost objects identified to enable cost allocation. Overheads refer to costs of operations and comprise of indirect costs in the form of selling and administrative expenses.
• Examples of Overheads are Salaries of administrative staff, rent of office, advertising expenses etc. The costs of the operations are allocated on basis of cost objects. Cost objects are units of cost allocation identified for overhead allocations and cost estimations.
• Examples of Cost objects for Overhead allocation are Number of units produced, number of labor hours worked etc.
To Determine:
Four items for direct materials and direct labor and cost allocation methodology.
2)
Introduction:
Job Costing
• Job Costing is a method of cost allocation and calculation used when the types of goods produced are specific in nature.
• The cost allocation is done for all products on basis of a specific cost estimate which is calculated by dividing the total costs for each process by the number of units produced.
• Job costing facilitates cost allocation in a simplistic manner based on the costs incurred specifically for certain units produced
Cost allocation of Overheads
• Cost allocation of Overheads takes place on basis of cost objects identified to enable cost allocation. Overheads refer to costs of operations and comprise of indirect costs in the form of selling and administrative expenses.
• Examples of Overheads are Salaries of administrative staff, rent of office, advertising expenses etc. The costs of the operations are allocated on basis of cost objects. Cost objects are units of cost allocation identified for overhead allocations and cost estimations.
• Examples of Cost objects for Overhead allocation are Number of units produced, number of labor hours worked etc.
To Determine:
Comparison of Job cost sheet with that of a Builder’s cost sheet
Want to see the full answer?
Check out a sample textbook solution
Chapter 19 Solutions
Fundamental Accounting Principles
- How much is in the august income statement?arrow_forwardGama Co. sold merchandise to Harper Co. on account for $50,000, with terms of 3/10, net 60. The cost of the merchandise sold was $30,000. Gama Co. issued a credit memo for $4,000 of undiscounted merchandise returned, which originally cost $2,000. Harper Co. paid the invoice within the discount period. What is the amount of gross profit earned by Gama Co. on the above transactions?arrow_forwardDetermine the missing amountarrow_forward
- How much sales could the firm have supported last year with its current level of fixed assets?arrow_forwardGalaxy Company budgets sales of $3,750,000, fixed costs of $95,300, and variable costs of $420,800. What is the contribution margin ratio for Galaxy Company? Answer this questionarrow_forwardDuring FY 2023, Delta Company plans to sell Gadgets for $18 a unit. Current variable costs are $7 a unit and fixed costs are expected to total $187,000. Use this information to determine the dollar value of sales for Delta to break even. (Round to the nearest whole dollar.)arrow_forward
- Paul Company had a beginning inventory of $92,000, an ending inventory of $152,000, a cost of goods sold of $282,000, and a sales revenue of $475,000. What is Paul' days in inventory? (365 days)arrow_forwardI need help finding the accurate solution to this general accounting problem with valid methods.arrow_forwardWhat would be the profitarrow_forward
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education