Pavlovich Prosthetics Company produces artificial limbs for individuals. Each prosthetic is unique. On January 1, three jobs, identified by the name of the person being fitted with the prosthetic, were in process with the following costs: Carter Pelham Tillson Direct materials $210 $615 $1,290 Direct labor 440 700 1,260 Applied overhead 374 595 1,071 Total $1,024 $1,910 $3,621
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.
| Carter | Pelham | Tillson | |
| Direct materials | $210 | $615 | $1,290 |
| Direct labor | 440 | 700 | 1,260 |
| Applied |
374 | 595 | 1,071 |
| Total | $1,024 | $1,910 | $3,621 |
|
|
Materials
|
Direct Labor
|
| Carter | $600 | $300 |
| Pelham | 550 | 200 |
| Tillson | 770 | 240 |
| Jasper | 2,310 | 2,100 |
| Dashell | 190 | 240 |
| Required: | |
| 1. | If overhead is applied on the basis of direct labor dollars, what is the overhead rate? Round your answer to four decimal places. |
| 2. | Prepare simple job-order cost sheets for each of the five jobs in process during January. Round all amounts to the nearest dollar. |
| 3. | What is the ending balance of Work in Process on January 31? What is the Cost of Goods Sold in January? |
| 4. | Suppose that Pavlovich Prosthetics Company prices its |
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 2 images
