The weekly time tickets indicate the following distribution of labor hours for three direct labor employees: Hours Process Job 301 Job 302 Job 303 Improvement Tom Couro 9 14 12 1 David Clancy 12 10 13 3 Jose Cano 13 15 17 3 The direct labor rate earned per hour by the three employees is as follows: Tom Couro $30 David Clancy 36 Jose Cano 26 The process improvement category includes training, quality improvement, and other indirect tasks. Required: a. Journalize the entry on July 15 to record the factory labor costs for the week. Refer to the chart of accounts for the exact wording of the account titles. b. Assume that Jobs 301 and 302 were completed but not sold during the week and that Job 303 remained incomplete at the end of the week. How would the direct labor costs for all three jobs be reflected on the financial statements at the end of the week?
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.
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Hours
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Process
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Job 301
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Job 302
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Job 303
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Improvement
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| Tom Couro | 9 | 14 | 12 | 1 |
| David Clancy | 12 | 10 | 13 | 3 |
| Jose Cano | 13 | 15 | 17 | 3 |
| Tom Couro | $30 |
| David Clancy | 36 |
| Jose Cano | 26 |
| Required: | |
| a. |
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| b. Assume that Jobs 301 and 302 were completed but not sold during the week and that Job 303 remained incomplete at the end of the week. How would the direct labor costs for all three jobs be reflected on the financial statements at the end of the week? |
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