bal Corporation produces special products to customers’ specifications and uses job order cost system. The following data relates to its operations for the month of December, 2015: 1. Purchased raw material on account Rs. 60,000 2. Material issued to factory Rs. 45,000 of which Rs. 3,000 was used indirectly. 3. Labour used: direct Rs. 70,000 and indirect Rs. 4,000. 4. Factory overhead cost incurred Rs. 46,000 5. Factory overhead is applied at 95% of direct labour cost. 6. Job were completed to the extent of 90%. 7. Goods sold on account Rs. 230,000 8. Finished goods inventory at end valued at Rs. 15,000 Required a. General journal entries for each of the above transactions also make an adjusting entry of over or under a
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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