Problem 1 Brabensky Company produces a product in two departments: (1) Assembly and (2) Painting. The company uses a process cost accounting system. Purchased raw materials for $90,000 on account. Raw materials requisitioned for production were: Direct materials Assembly department $77,000 Factory labor used: Assembly department $34,000 Painting department 18,000 Manufacturing overhead is applied to the product based on machine hours used in each department: Assembly department—320 machine hours at $40 per machine hour. Painting department—120 machine hours at $15 per machine hour. Units costing $86,000 were completed in the Painting Department and were transferred to the Finished Good. Finished goods costing $70,000 were sold on cash for $102,000. Instructions Prepare the journal entries to record the preceding transactions for Brabensky Company
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.
Problem 1
Brabensky Company produces a product in two departments: (1) Assembly and (2) Painting. The company uses a
- Purchased raw materials for $90,000 on account.
- Raw materials requisitioned for production were:
Direct materials
Assembly department $77,000
- Factory labor used:
Assembly department $34,000
Painting department 18,000
- Manufacturing overhead is applied to the product based on machine hours used in each department:
Assembly department—320 machine hours at $40 per machine hour.
Painting department—120 machine hours at $15 per machine hour.
- Units costing $86,000 were completed in the Painting Department and were transferred to the Finished Good.
- Finished goods costing $70,000 were sold on cash for $102,000.
Instructions
Prepare the
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