Kostelnik Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $237,000, variable manufacturing overhead of $3.90 per machine-hour, and 30,000 machine-hours. The company has provided the following data concerning Job A496 which was recently completed: Number of units in the job 20 Total machine-hours 80 Direct materials $ 500 Direct labor cost $ 2,160The total job cost for Job A496 is closest to: A $3,604 B $1,444 C $2,660 D $3,104
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.
choose the correct answer (mcqs) no need of any explanation
1) Kostelnik Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed
| Number of units in the job | 20 |
| Total machine-hours | 80 |
| Direct materials | $ 500 |
| Direct labor cost | $ 2,160 |
| A |
$3,604
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| B |
$1,444
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| C |
$2,660
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| D |
$3,104
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2) Lucas Corporation uses the weighted-average method in its
| Beginning work in process inventory: | |||
| Units in beginning work in process inventory | 900 | ||
| Materials costs | $ | 9,600 | |
| Conversion costs | $ | 7,700 | |
| Percent complete with respect to materials | 60 | % | |
| Percent complete with respect to conversion | 45 | % | |
| Units started into production during the month | 8,100 | ||
| Units transferred to the next department during the month | 6,900 | ||
| Materials costs added during the month | $ | 115,800 | |
| Conversion costs added during the month | $ | 120,500 | |
| Ending work in process inventory: | |||
| Units in ending work in process inventory | 2,100 | ||
| Percent complete with respect to materials | 75 | % | |
| Percent complete with respect to conversion | 20 | % |
The cost of ending work in process inventory in the first processing department according to the company's cost system is closest to:
| A |
$67,851
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| B |
$50,888
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| C |
$13,570
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| D |
$30,660
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3) Which of the following statements concerning a process cost accounting system is false?
| A |
If material is used evenly throughout a process, the number of equivalent material units will equal the number of equivalent units for the conversion (processing) costs.
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| B |
The units in beginning inventory plus the units transferred out during the month should equal the units in the ending inventory plus the units transferred in during the month.
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| C |
The units in beginning inventory plus the units transferred in during the month should equal the units in the ending inventory plus the units transferred out during the month.
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| D |
Actual costing may be used in a process costing system to assign indirect overhead costs to departments.
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