Job Cost: On April 1, Sangvikar Company had the following balances in its inventory accounts: Material Inventory $ 12,730 Work -in-Process Inventory 21,340 Finished Goods Inventory 8,700 Work-in-process inventory is made up of three jobs with the following costs: Job 114 Job 115 Job 116 Direct Materials $ 2,411 $ 2,640 $ 3,650 Direct Labor 1,800 1,560 4,300 Applied Overhead 1,170 1,014 2,795 During April, Sangvikar experienced the transactions listed below.a. Materials purchased on account, $29,000.b. Materials requisitioned: Job 114, $16,500; Job 115, $12,200; and Job 116, $5,000.c. Job tickets were collected and summarized: Job 114, 150 hours at $12 per hour; Job 115, 220 hours at $14 per hour; and Job 116, 80 hours at $18 per hour.d. Overhead is applied on the basis of direct labor cost.e. Actual overhead was $4,415.f. Job 115 was completed and transferred to the finished goods warehouse.g. Job 115 was shipped, and the customer was billed for 125 percent of the cost. Required:1. Prepare journal entries for the April transactions.2. Calculate the ending balances of each of the inventory accounts as of April 30.
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.
On April 1, Sangvikar Company had the following balances in its inventory accounts:
| Material Inventory |
$ 12,730 |
| Work -in-Process Inventory |
21,340 |
| Finished Goods Inventory | 8,700 |
Work-in-process inventory is made up of three jobs with the following costs:
| Job 114 | Job 115 | Job 116 | |
| Direct Materials | $ 2,411 | $ 2,640 | $ 3,650 |
| Direct Labor | 1,800 | 1,560 | 4,300 |
| Applied Overhead | 1,170 | 1,014 | 2,795 |
During April, Sangvikar experienced the transactions listed below.
a. Materials purchased on account, $29,000.
b. Materials requisitioned: Job 114, $16,500; Job 115, $12,200; and Job 116, $5,000.
c. Job tickets were collected and summarized: Job 114, 150 hours at $12 per hour; Job 115, 220 hours at $14 per hour; and Job 116, 80 hours at $18 per hour.
d. Overhead is applied on the basis of direct labor cost.
e. Actual overhead was $4,415.
f. Job 115 was completed and transferred to the finished goods warehouse.
g. Job 115 was shipped, and the customer was billed for 125 percent of the cost.
Required:
1. Prepare
2. Calculate the ending balances of each of the inventory accounts as of April 30.
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