Raw Materials Bal. 1/1 35,000 Credits ? Debits 160,000 Bal. 12/31 45,000 Manufacturing Overhead Debits 188,400 Credits ? Work in Process Bal. 1/1 40,000 Credits 530,000 Direct materials 110,000 Direct labor 210,000 Overhead 218,400 Bal. 12/31 ? Factory Wages Payable Debits 225,000 Bal. 1/1 19,000 Credits 220,000 Bal. 12/31 14,000 Finished Goods Bal. 1/1 60,000 Credits ? Debits ? Bal. 12/31 90,000 Cost of Goods Sold Debits ? Required: 1. What was the cost of raw materials used in production during the year? 2. How much of the materials in (1) above consisted of indirect materials? 3. How much of the factory labor cost for the year consisted of indirect labor?
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 3-11 (Algo) T-Account Analysis of Cost Flows [LO3-2, LO3-3, LO3-4]
Selected T-accounts of Moore Company are given below for the just completed year:
| Raw Materials | |||
| Bal. 1/1 | 35,000 | Credits | ? |
| Debits | 160,000 | ||
| Bal. 12/31 | 45,000 |
| Manufacturing Overhead | |||
| Debits | 188,400 | Credits | ? |
| Work in Process | |||
| Bal. 1/1 | 40,000 | Credits | 530,000 |
| Direct materials | 110,000 | ||
| Direct labor | 210,000 | ||
| Overhead | 218,400 | ||
| Bal. 12/31 | ? |
| Factory Wages Payable | |||
| Debits | 225,000 | Bal. 1/1 | 19,000 |
| Credits | 220,000 | ||
| Bal. 12/31 | 14,000 |
| Finished Goods | |||
| Bal. 1/1 | 60,000 | Credits | ? |
| Debits | ? | ||
| Bal. 12/31 | 90,000 |
| Cost of Goods Sold | |||
| Debits | ? |
Required:
1. What was the cost of raw materials used in production during the year?
2. How much of the materials in (1) above consisted of indirect materials?
3. How much of the
4. What was the cost of goods manufactured for the year?
5. What was the unadjusted cost of goods sold for the year? Do not include any underapplied or overapplied overhead in your answer.
6. If overhead is applied to production on the basis of direct labor cost, what predetermined overhead rate was in effect during the year?
7. Was manufacturing overhead underapplied or overapplied? By how much?
8. Compute the ending balance in Work in Process. Assume that this balance consists entirely of goods started during the year. If $13,950 of this balance is direct labor cost, how much of it is direct materials cost? Applied overhead cost?
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