Job 86 Job 87 Direct materials $4,800 $1,600 Direct labor 1,200 3,000 Applied overhead 888 2,220 Balance, March 1 $6,888 $6,820 During March, two more jobs (88 and 89) were started. The following direct materials and di- rect labor costs were added to the four jobs during the month of March: Job 86 Job 87 Job 88 Job 89 Direct materials $3,000 $7.000 $2,100 $1,500 Direct labor 800 6,000 900 500
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.
Prepare
Rate, Ending Balance of WIP, Finished Goods, and COGS
At the beginning of March, Mendez Company had two jobs in process, Job 86 and Job 87, with
the following accumulated cost information:
At the end of March, Jobs 86, 87, and 89 were completed. Only Job 87 was sold. On March 1,
the balance in Finished Goods was zero.
Required:
1. Calculate the overhead rate based on direct labor cost. (Note: Round to three decimal
places.)
2. Prepare a brief job-order cost sheet for the four jobs. Show the balance as of March 1 as
well as direct materials and direct labor added in March. Apply overhead to the four jobs
for the month of March, and show the ending balances.
3. Calculate the ending balances of Work in Process and Finished Goods as of March 31.
4. Calculate the Cost of Goods Sold for March.
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