840 of direct labor, and Rs.6,292 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate on the basis of direct labor cost. During June, the following activity was recorded: Raw materials (all direct materials): Beginning balance
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.
JN Corporation had only one job in process on June 1. The job had been charged with Rs.3,400 of direct materials, Rs.4,840 of direct labor, and Rs.6,292 of manufacturing
During June, the following activity was recorded:
|
Raw materials (all direct materials): |
|
|
Beginning balance |
8,500 |
|
Purchased during the month |
42,000 |
|
Used in production |
49,500 |
|
Labor: |
|
|
Direct labor-hours worked during the month |
2,250 |
|
Direct labor cost incurred |
27,520 |
|
Actual manufacturing overhead costs incurred |
52,800 |
|
Inventories: |
|
|
Raw materials, June 30 |
? |
|
Work in process, June 30 |
37,190 |
Work in process inventory on June 30 contains Rs.9,940 of direct labor cost.
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