a. Direct and indirect materials used. For a compound transaction, if an amount box does not require an entry, leave it blank. b. Direct and indirect labor used. For a compound transaction, if an amount box does not require an entry, leave it blank. c. Factory overhead applied to all four jobs (a single overhead rate is used based on direct labor cost). d. Completion of Jobs 301 and 302.
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.
Entries for
Old School Publishing Inc. began printing operations on January 1. Jobs 301 and 302 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs 303 and 304 are still in process at the end of the month, and all applicable costs except factory overhead have been recorded on the related cost sheets. In addition to the materials and labor charged directly to the jobs, $2,910 of indirect materials and $35,210 of indirect labor were used during the month. The cost sheets for the four jobs entering production during the month are as follows, in summary form:
| Job 301 | Job 302 | ||||
| Direct materials | $30,110 | Direct materials | $14,080 | ||
| Direct labor | 11,500 | Direct labor | 6,000 | ||
| Factory overhead | 6,325 | Factory overhead | 3,300 | ||
| Total | $47,935 | Total | $23,380 | ||
| Job 303 | Job 304 | ||||
| Direct materials | $38,910 | Direct materials | $8,670 | ||
| Direct labor | 12,800 | Direct labor | 1,700 | ||
| Factory overhead | Factory overhead |
Journalize the summary entry to record each of the following operations for January (one entry for each operation):
a. Direct and indirect materials used. For a compound transaction, if an amount box does not require an entry, leave it blank.
b. Direct and indirect labor used. For a compound transaction, if an amount box does not require an entry, leave it blank.
c. Factory overhead applied to all four jobs (a single overhead rate is used based on direct labor cost).
d. Completion of Jobs 301 and 302.
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