Date Labor Time Record No. Description Amount 4/02 655 10 hours e $16 per hour $ 160 4/03 656 20 hours @ $15 per hour 300 Materials Requisition No. Date Description Amount 4/02 63 31 Ibs. polycarbonate plastic e $11 per lb. $ 341 4/02 25 Ibs. acrylic plastic e $29 per Ib. 64 725 4/03 74 3 Ibs. refined aluminum e $45 per Ib. 135
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.
Preparing and using a job cost record to prepare
Ki Technology Co. manufactures DVDs for computer software and entertainment companies. Ki uses
On April 2, Ki began production of 6,000 DVDs, Job 423, for Paradigm Pictures for $1.20 sales price per DVD. Ki promised to deliver the DVDs to Paradigm Pictures by April 5. Ki incurred the following direct costs:
Ki Technology allocates manufacturing overhead to jobs based on the relation between estimated overhead of $574,000 and estimated direct labor costs of job 423 was completed and shipped on April 3.
Requirements
- Prepare a job cost record for job 423. Calculate the predetermined overhead allocation rate (round to two decimal places); then allocate manufacturing overhead to the job.
- Journalize in summary form the requisition of direct materials and the assignment of direct labor and the allocation of manufacturing overhead to job 423. Wages are not yet paid.
- Journalize completion of the job and the sale of the 6,000 DVDs on account.
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