Job-Order Cost Sheets, Balance in Work in Process and Finished Goods Schulberg Company, a job-order costing firm, worked on three jobs in July. Data are as follows: Overhead is applied to jobs at the rate of $20 per machine hour. By July 31, Jobs 94 and 96 were completed. Jobs 90 and 94 were sold. Job 95 remained in process. On July 1, the balance in Finished Goods was $49,000 (consisting of Job 90 for $25,600 and Job 92 for $23,400). Schulberg prices its jobs at cost plus 20 percent. During July, variable marketing expenses were 5 percent of sales, and fixed marketing expenses were $2,000; administrative expenses were $4,800. Required: 1. Prepare job-order cost sheets for all jobs in process during July, showing all costs through July 31. 2. Calculate the balance in Work in Process on July 31. 3. Calculate the balance in Finished Goods on July 31. 4. Calculate Cost of Goods Sold for July. 5. Calculate operating income for Schulberg Company for the month of July.
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.
Job-Order Cost Sheets, Balance in Work in Process and Finished Goods Schulberg Company, a job-order costing firm, worked on three jobs in July. Data are as follows:
Overhead is applied to jobs at the rate of $20 per machine hour. By July 31, Jobs 94 and 96 were completed. Jobs 90 and 94 were sold. Job 95 remained in process. On July 1, the balance in Finished Goods was $49,000 (consisting of Job 90 for $25,600 and Job 92 for $23,400). Schulberg prices its jobs at cost plus 20 percent. During July, variable marketing expenses were 5 percent of sales, and fixed marketing expenses were $2,000; administrative expenses were $4,800.
Required:
1. Prepare job-order cost sheets for all jobs in process during July, showing all costs through July 31.
2. Calculate the balance in Work in Process on July 31.
3. Calculate the balance in Finished Goods on July 31.
4. Calculate Cost of Goods Sold for July.
5. Calculate operating income for Schulberg Company for the month of July.
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