Murray’s Missiles uses a job-order costing system. During April, the following costs appeared in the Work in Process Inventory account: Beginning balance $ 24,000 Direct material used 70,000 Direct labor incurred 60,000 Applied overhead 48,000 Cost of goods manufactured 185,000 Murray’s Missiles applies overhead on the basis of direct labor cost. There was only one job left in Work in Process at the end of April which contained $5,600 of overhead. What amount of direct material was included in this job? Select one: a. $8,000 b. $4,480 c. $7,200 d. $4,400 e. $6,920
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.
Murray’s Missiles uses a
|
Beginning balance |
$ 24,000 |
|
Direct material used |
70,000 |
|
Direct labor incurred |
60,000 |
|
Applied overhead |
48,000 |
|
Cost of goods manufactured |
185,000 |
Murray’s Missiles applies overhead on the basis of direct labor cost. There was only one job left in Work in Process at the end of April which contained $5,600 of overhead. What amount of direct material was included in this job?
Job cost is an estimation of the total cost of a customized order in a specific time period.
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