Herschel Enterprises uses a job-order costing system. At the beginning of March, the company had two jobs in process with the following costs: Direct Material Direct Labor Overhead Job #893 $3,400 $510 $255 Job #904 1,100 289 ? Herschel Enterprises pays its workers $8.50 per hour and applies overhead on a direct labor hour basis. During March, Herschel’s employees worked on Job #978. At the end of the month, the job was not yet complete but $714 of overhead had been applied to this job. Total Work in Process at the end of the month was $6,800 and all other jobs in process had a total cost of $3,981. What amount of direct material is included in Job #978? Select one: a. $725 b. $935 c. $1,391 d. $2,142 e. $677
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.
Herschel Enterprises uses a
|
|
Direct Material |
Direct Labor |
Overhead |
|
Job #893 |
$3,400 |
$510 |
$255 |
|
Job #904 |
1,100 |
289 |
? |
Herschel Enterprises pays its workers $8.50 per hour and applies overhead on a direct labor hour basis.
During March, Herschel’s employees worked on Job #978. At the end of the month, the job was not yet complete but $714 of overhead had been applied to this job. Total Work in Process at the end of the month was $6,800 and all other jobs in process had a total cost of $3,981. What amount of direct material is included in Job #978?
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