Royal Technology Company uses a job order cost system. The following data summarize the operations related to production for March: Materials purchased on account, $770,000 Materials requisitioned, $680,000, of which $75,800 was for general factory use Factory labor used, $756,000, of which $182,000 was indirect Other costs incurred on account for factory overhead, $245,000; selling expenses, $171,500; and administrative expenses, $110,600 Prepaid expenses expired for factory overhead, $24,500; for selling expenses, $28,420; and for administrative expenses, $16,660 Depreciation of factory equipment was $49,500; of office equipment, $61,800; and of office building, $14,900 Factory overhead costs applied to jobs, $568,500 Jobs completed, $1,500,000 Cost of goods sold, $1,375,000 Required: Journalize the entries to record the summarized operations. For a compound transaction, if an amount box does not require an entry, leave it blank.
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.
Royal Technology Company uses a
- Materials purchased on account, $770,000
- Materials requisitioned, $680,000, of which $75,800 was for general factory use
- Factory labor used, $756,000, of which $182,000 was indirect
- Other costs incurred on account for factory overhead, $245,000; selling expenses, $171,500; and administrative expenses, $110,600
- Prepaid expenses expired for factory overhead, $24,500; for selling expenses, $28,420; and for administrative expenses, $16,660
Depreciation of factory equipment was $49,500; of office equipment, $61,800; and of office building, $14,900Factory overhead costs applied to jobs, $568,500- Jobs completed, $1,500,000
- Cost of goods sold, $1,375,000
Required:
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