Exercise 5-18 Balance of Work in Process and Finished Goods, Cost of Goods Sold Hung Lee Company uses job-order costing. At the end of the month, the following information was gathered: Job Total Cost Complete? Sold? 301 $ 610 Yes No 302 1,300 Yes Yes 303 460 No No 304 2,670 Yes No 305 3,800 Yes No 306 230 No No 307 300 Yes Yes 308 650 No No 309 1,035 No No 310 217 No No The beginning balance of Finished Goods was zero. Required: 1. Calculate the balance in Work in Process at the end of the month. 2. Calculate the balance in Finished Goods at the end of the month. 3. Calculate Cost of Goods Sold for the month.
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.
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