The following account appears in the ledger after only part of the postings have been completed for July, the first month of the current fiscal year: Work in Process Balance, July 1 53,200 Direct materials 147,000 Direct labor 120,000 Factory overhead is applied to jobs at the rate of 60% of direct labor cost. The actual factory overhead incurred for July was $75,000. Jobs completed during the month totaled $301,200. (a) Prepare the journal entries to record: (1) the application of factory overhead to production during July, and (2) the jobs completed during July. (b) What is the balance ($ amount and if it is a DR or CR balance) of the factory overhead account on July 31? (c) Was factory overhead overapplied or underapplied on July 31?
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.
The following account appears in the ledger after only part of the postings have been completed for July, the first month of the current fiscal year:
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Work in Process |
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Balance, July 1 |
53,200 |
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Direct materials |
147,000 |
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Direct labor |
120,000 |
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Factory overhead is applied to jobs at the rate of 60% of direct labor cost. The actual factory overhead incurred for July was $75,000. Jobs completed during the month totaled $301,200.
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(a) |
Prepare the |
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(b) |
What is the balance ($ amount and if it is a DR or CR balance) of the factory overhead account on July 31? |
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(c) |
Was factory overhead overapplied or underapplied on July 31? |
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(d) |
Determine the cost of the unfinished jobs on July 31. |
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JOURNAL
Date Post. DR CR |
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(a)-1 |
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(a)-2 |
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(b) |
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(c) |
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(d)
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