The work in process of Mallin Company which uses a job order cost system follows: Work in Process--Debits April 1 Balance 25,000 Direct Materials 50,000 Direct Labor 40,000 Applied OH 30,000 Credits Finished Goods, 125,450 Overhead Applied to production is based on direct labor cost. The work in process at April 30 represents the cost of job 456 which has been charged with direct labor cost of P3,000 and Job 789 which has been charged with applied overhead of P2,000. Questions: 1. The cost of direct materials charged to Job 456 and 789 totaled? 2. Prime cost for the month totaled?
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.
The work in process of Mallin Company which uses a job order cost system follows:
Work in Process--Debits
| April 1 Balance | 25,000 |
| Direct Materials | 50,000 |
| Direct Labor | 40,000 |
| Applied OH | 30,000 |
Credits
Finished Goods, 125,450
Overhead Applied to production is based on direct labor cost. The work in process at April 30 represents the
Questions:
1. The cost of direct materials charged to Job 456 and 789 totaled?
2. Prime cost for the month totaled?
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