If CustomCraft uses job order costing, each of the followingis true, except: a. Individual job cost sheets accumulate all manufactur-ing costs applicable to each job and together constitute a subsidiary ledger for the Work in Process Inventoryaccount.b. Direct labor cost applicable to individual jobs isrecorded when paid by a debit to Work in ProcessInventory and a credit to Cash, as well as by enteringthe amount on the job cost sheets.c. The amount of direct materials used in individual jobsis recorded by debiting the Work in Process Inventoryaccount and crediting the Materials Inventory account, aswell as by entering the amount used on job cost sheets.d. The manufacturing overhead applied to each job istransferred from the Manufacturing Overhead accountto the Work in Process Inventory account, as well asentered on the individual job cost sheets.
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.
If CustomCraft uses
is true, except:
a. Individual job cost sheets accumulate all
ing costs
a subsidiary ledger for the Work in Process Inventory
account.
b. Direct labor cost applicable to individual jobs is
recorded when paid by a debit to Work in Process
Inventory and a credit to Cash, as well as by entering
the amount on the job cost sheets.
c. The amount of direct materials used in individual jobs
is recorded by debiting the Work in Process Inventory
account and crediting the Materials Inventory account, as
well as by entering the amount used on job cost sheets.
d. The manufacturing overhead applied to each job is
transferred from the Manufacturing Overhead account
to the Work in Process Inventory account, as well as
entered on the individual job cost sheets.
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