Finished Goods $62,000 Work in Process-Spinning Department Work in Process-Tufting Department 35,000 28,500 Materials 17,000 A. Materials purchased on account.. B. Materials requisitioned for use: Fiber-Spinning Department. Carpet backing-Tufting Department. Indirect materials-Spinning Department Indirect materials-Tufting Department C.Labor used: $500,000 $275,000 110,000 46,000 39,500 Direct labor-Spinning Department.. Direct labor-Tufting Department... Indirect labor-Spinning Department . Indirect labor-Tufting Department. D. Depreciation charged on fixed assets: Spinning Department. Tufting Department... E. Expired prepaid factory insurance: Spinning Department. Tufting Department... F. Applied factory overhead: Spinning Department. Tufting Department... G. Production costs transferred from Spinning Department to Tufting Department H. Production costs transferred from Tufting Department to Finished Goods... L Cost of goods sold during the period. $185,000 98,000 18,500 9,000 $ 12,500 8,500 $ 2,00 1,000 $ 80,000 55,000 $547,000 $807,200 $795,200
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
Port Ormond Carpet Company manufactures carpets. Fiber is placed in process in the Spinning Department, where it U spun into yarn. The output of the Spinning Department is transferred to the Tufting Department, where carpet backing is added at I the beginning of the process and the process is completed .On January 1, Port Ormond Carpet Company had the following inventories:
Departmental accounts are maintained for factory overhead, and both have zero balances on January 1.
Manufacturing operations for January are summarized as follows:
Instructions
1.Journalize the entries to record the operations, identifying each entry by letter.
2. Compute the January 31 balances of the inventory accounts.
3. Compute the January 31 balances of the factory overhead accounts
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