How do I find: direct materials, direct labor, and manufacturing overhead?Assume that the $40,000 ending balance in Work in Process includes $9,000 of direct materials. Given this assumption, supply the information missing below:Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased). Its predetermined overhead rate was based on a cost formula that estimated $120,400 of manufacturing overhead for an estimated allocation base of $86,000 direct material dollars to be used in production. The company has provided the following data for the just completed year:Purchase of raw materials $ 133,000Direct labor cost $ 82,000Manufacturing overhead costs:Indirect labor $ 118,600Property taxes $ 8,000Depreciation of equipment $ 18,000Maintenance $ 15,000Insurance $ 9,700Rent, building $ 39,000Beginning EndingRaw Materials $ 26,000 $ 13,000Work in Process $ 44,000 $ 40,000Finished Goods $ 71,000 $ 60,000
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.
How do I find: direct materials, direct labor, and manufacturing overhead?
Assume that the $40,000 ending balance in Work in Process includes $9,000 of direct materials. Given this assumption, supply the information missing below:
Gitano Products operates a
Purchase of raw materials $ 133,000
Direct labor cost $ 82,000
Manufacturing overhead costs:
Indirect labor $ 118,600
Property taxes $ 8,000
Depreciation of equipment $ 18,000
Maintenance $ 15,000
Insurance $ 9,700
Rent, building $ 39,000
Beginning Ending
Raw Materials $ 26,000 $ 13,000
Work in Process $ 44,000 $ 40,000
Finished Goods $ 71,000 $ 60,000
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