Oak Creek Furniture Factory (OCFF), a custom furniture manufacturer, uses job order costing to track the cost of each customer order. On March 1, OCFF had two jobs in process with the following costs: Work in Process Balance on 3/1 Job 33 $ 7,500 Job 34 6,000 $ 13,500 Source documents revealed the following during March: Materials Requisitions Forms Labor Time Tickets Status of Job at Month-End Job 33 $ 3,500 $ 6,500 Completed and sold Job 34 6,000 7,800 Completed, but not sold Job 35 4,200 3,250 In process Indirect 1,300 2,140 $ 15,000 $ 19,690 The company applies overhead to products at a rate of 150 percent of direct labor cost. Required: Prepare journal entries to record the materials requisitions, labor costs, and applied overhead. Note: If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.
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.
Oak Creek Furniture Factory (OCFF), a custom furniture manufacturer, uses
| Work in Process | Balance on 3/1 |
|---|---|
| Job 33 | $ 7,500 |
| Job 34 | 6,000 |
| $ 13,500 |
Source documents revealed the following during March:
| Materials Requisitions Forms | Labor Time Tickets | Status of Job at Month-End | |
|---|---|---|---|
| Job 33 | $ 3,500 | $ 6,500 | Completed and sold |
| Job 34 | 6,000 | 7,800 | Completed, but not sold |
| Job 35 | 4,200 | 3,250 | In process |
| Indirect | 1,300 | 2,140 | |
| $ 15,000 | $ 19,690 |
The company applies overhead to products at a rate of 150 percent of direct labor cost.
Required:
Prepare journal entries to record the materials requisitions, labor costs, and applied overhead.
Note: If no entry is required for a transaction/event, select "No
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