#5-18 Feldspar Company uses an ABC system to apply overhead. There are three activity rates, shown. Setting up $20 per setup Machining $5.10 per machine hour Other overhead 80% of direct labor cost During September, Feldspar worked on three jobs. Data relating to these jobs follow: Job 13-280 Job 13-281 Job 13-282 Units in each order 200 500 100 Units sold 200 — 100 Materials requisitioned $4,730 $3,800 $5,600 Direct labor cost $2,000 $4,600 $ 800 Machine hours 80 100 40 Number of setups 20 15 25 During September, Jobs 13-280 and 13-282 were completed and transferred to Finished Goods Inventory. Job 13-280 was sold by the end of the month. Job 13-281 was the only unfinished job at the end of the month. Instructions: 1). Calculate the per-unit cost of Jobs 13-280 and 13-282. (Round unit cost to nearest cent.) 2). Compute the ending balance in the work-in-process inventory account 3). Prepare the journal entries reflecting the completion of Jobs 13-280 and 13-282 and the sale of Job 13-280 on account. The selling price is 150 percent of cost.
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.
#5-18
Feldspar Company uses an ABC system to apply overhead. There are three activity rates, shown.
| Setting up | $20 per setup |
| Machining | $5.10 per machine hour |
| Other overhead |
80% of direct labor cost |
During September, Feldspar worked on three jobs. Data relating to these jobs follow:
| Job 13-280 | Job 13-281 | Job 13-282 | |
|---|---|---|---|
| Units in each order | 200 | 500 | 100 |
| Units sold | 200 | — | 100 |
| Materials requisitioned | $4,730 | $3,800 | $5,600 |
| Direct labor cost | $2,000 | $4,600 | $ 800 |
| Machine hours | 80 | 100 | 40 |
| Number of setups | 20 | 15 | 25 |
During September, Jobs 13-280 and 13-282 were completed and transferred to Finished Goods Inventory. Job 13-280 was sold by the end of the month. Job 13-281 was the only unfinished job at the end of the month.
Instructions:
1). Calculate the per-unit cost of Jobs 13-280 and 13-282. (Round unit cost to nearest cent.)
2). Compute the ending balance in the work-in-process inventory account
3). Prepare the
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