L. What is the ending balance in Finished Goods ? (Show T-Account ) M. Assuming that the company closes its underapplied or overapplied overhead to Cost of Goods Sold, what is the adjusted cost of goods sold for the year? N. What is the gross margin for the year ? O. What is the net operating income for the year ?
L. What is the ending balance in Finished Goods ? (Show T-Account )
M. Assuming that the company closes its underapplied or overapplied
N. What is the gross margin for the year ?
O. What is the net operating income for the year ?
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Steps in the Job Order Costing Process:
In job order costing systems, the following steps are involved to arrive at the cost for a specific job.
1. Identification of the job, each job can be specified with job number or job name or even known as the customer name.
2. Tracing of the direct costs of the job will include Direct Material and Direct Labor.
3. Identifying the indirect costs and charge them to Manufacturing Overhead Account. This will include, indirect material, indirect labor, factory overhead, etc.
4. Apply indirect costs to the job using the predetermined overhead rate.
5. Transfering the work-in-process for the goods produced to the Finished Goods Account.
6. Accounting for the sales made during the accounting period, along with the charging of the cost of goods sold account.
7. Finding the total cost by adding all the costs.
8. Closing the under or overapplied manufacturing overheads to either the cost of goods sold or the income statement.
9. Calculating the revenue and then the profit, by preparing the income statement.
With the help of these steps, we will account for the transactions, and calculate the requirement as follows
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