$19,200 $23,040 $62,240 Current year’s costs 24,000 28,800 34,560 87,360 7641 Balance 1/1 8,800 14,400 17,280 40,480 Current year’s costs 34,400 38,400 46,080 118,880 7642 Current year’s costs 46,400 44,000 52,800 143,200
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.
For the year ended December 31, 2022, the
|
Job
Number |
Explanation |
Direct
Materials |
Direct
Labor |
Manufacturing
|
Total
Costs |
|||||
|---|---|---|---|---|---|---|---|---|---|---|
|
7640
|
Balance 1/1
|
$20,000 | $19,200 | $23,040 | $62,240 | |||||
|
Current year’s costs
|
24,000 | 28,800 | 34,560 | 87,360 | ||||||
|
7641
|
Balance 1/1
|
8,800 | 14,400 | 17,280 | 40,480 | |||||
|
Current year’s costs
|
34,400 | 38,400 | 46,080 | 118,880 | ||||||
|
7642
|
Current year’s costs
|
46,400 | 44,000 | 52,800 | 143,200 |
Other data:
| 1. | Raw materials inventory totaled $12,000 on January 1. During the year, $112,000 of raw materials were purchased on account. | |
| 2. | Finished goods on January 1 consisted of Job No. 7638 for $69,600 and Job No. 7639 for $73,600. | |
| 3. | Job No. 7640 and Job No. 7641 were completed during the year. | |
| 4. | Job Nos. 7638, 7639, and 7641 were sold on account for $424,000. | |
| 5. | Manufacturing overhead incurred on account totaled $96,000. | |
| 6. | Incurred |
|
| 7. | Assigned indirect materials of $11,200 and indirect labor of $14,400. |
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