Preston & Grover Soap Company manufacturing powdered detergent. Phosphate is placed in process in the making department, where it is turned into granulars. The output of the marking is transferred to the Packing Department, where packaging is added at the beginning of the process. Only July 1, Preston & Grover Soap Company had the following inventories: Finished goods $ 13,500 Work in process-making 6,790 Work in process-maxing 7,350 Materials 5,100 Department account are maintain for overhead, which both have zero balances on July 1 Manufacturing operations for July are summarized as follows A. Materials purchased on account $149,800 B. materials requisitioned for use Phosphate-making department $105,700 Packaging-packing department 31,300 Indirect materials-making department 4,980 Indirect materials-packing department 1,530 C. Labor used Direct L-making department 32,400 Direct L-packing department 40,900 Indirect L-making department 15,400 Indirect L-packing department 18,300 D. Depreciation charged on fixed assets Making dept-10,700 Packing dept-7,900 E. Expired prepaid factory insurance Making dept-2,000 Packing dept-1,500 F. Applied factory overhead Making dept-32,570 Packing dept-30,050 G. Production costs transferred from Making dept to packing dept 166,790 H. Production costs transferred from packing dept to Finished Goods 263,400 I. Cost of goods sold during the period-265,200 Instructions 1. Journalize the entries to record the operations, identifying each entry by letter 2. Compute the July 31 balances of the inventory accounts 3. Compute the July 31 balances of the factory overhead accounts
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.
Preston & Grover Soap Company
manufacturing powdered detergent. Phosphate is placed in process in the
making department, where it is turned into granulars. The output of the
marking is transferred to the Packing Department, where packaging is
added at the beginning of the process. Only July 1, Preston & Grover
Soap Company had the following inventories:
Finished goods $ 13,500 Work in process-making 6,790 Work in process-maxing 7,350
Materials 5,100
Department account are maintain for overhead, which both have zero balances on July 1
Manufacturing operations for July are summarized as follows
A. Materials purchased on account $149,800
B. materials requisitioned for use
Phosphate-making department $105,700
Packaging-packing department 31,300
Indirect materials-making department 4,980
Indirect materials-packing department 1,530
C. Labor used
Direct L-making department 32,400
Direct L-packing department 40,900
Indirect L-making department 15,400
Indirect L-packing department 18,300
D. Depreciation charged on fixed assets
Making dept-10,700
Packing dept-7,900
E. Expired prepaid factory insurance
Making dept-2,000
Packing dept-1,500
F. Applied factory overhead
Making dept-32,570
Packing dept-30,050
G. Production costs transferred from Making dept to packing dept 166,790
H. Production costs transferred from packing dept to Finished Goods 263,400
I. Cost of goods sold during the period-265,200
Instructions
1. Journalize the entries to record the operations, identifying each entry by letter
2. Compute the July 31 balances of the inventory accounts
3. Compute the July 31 balances of the factory overhead accounts
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