The following information relates to the manufacturing operations of Delicious Co. during the month of January. The company uses job order costing. Please do the following journal entries. a) Purchases of direct materials on account during the month amount to $45000 Debit Credit Db Cr b) Materials used by the Production Department during the month total $40000 Debit Credit Db Cr c) Time cards of direct workers show 1200 hours worked on various jobs during the month for $20 per hour Calculations: Debit Credit Db Cr
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 information relates to the manufacturing operations of Delicious Co. during the month of January. The company uses
- a) Purchases of direct materials on account during the month amount to $45000
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- b) Materials used by the Production Department during the month total $40000
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- c) Time cards of direct workers show 1200 hours worked on various jobs during the month for $20 per hour
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- d) Direct workers were paid $20000 in January
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- e) Actual overhead costs for the month mount to $42000. Overhead costs has not been paid in cash yet, will be paid later.
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- f) Overhead is applied to jobs at a rate of 120% direct labor cost
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- g) Jobs with total accumulated costs of $105000 were completed during the month
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- h) During January, 50 units costing $25 per unit were sold on account for selling price of $35 per unit.
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İ) Work in process inventory had a beginning balance of $25,000 in January. Calculate the ending balance of work in process inventory at the end of January
Calculations:
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