Marco Company shows the following costs for three jobs worked on in April. Job 306 Job 307 Job 308 Balances on March 31 Direct materials used (in March) $ 30,000 $ 43,000 Direct labor used (in March) 24,000 17,000 Overhead applied (March) 12,000 8,500 Costs during April Direct materials used 133,000 220,000 $ 100,000 Direct labor used 100,000 154,000 100,000 Overhead applied ? ? ? Status on April 30 Finished (sold) Finished (unsold) In process Additional Information Raw Materials Inventory has a March 31 balance of $83,000. Raw materials purchases in April are $550,000, and total factory payroll cost in April is $377,000. Actual overhead costs incurred in April are indirect materials, $54,000; indirect labor, $23,000; factory rent, $36,000; factory utilities, $20,000; and factory equipment depreciation, $56,000. Predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $670,000 cash in April. 5-a. Compute gross profit for April. 5-b. Show how the three inventory accounts are reported on the April 30 balance sheet.
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.
Marco Company shows the following costs for three jobs worked on in April.
| Job 306 | Job 307 | Job 308 | |
|---|---|---|---|
| Balances on March 31 | |||
| Direct materials used (in March) | $ 30,000 | $ 43,000 | |
| Direct labor used (in March) | 24,000 | 17,000 | |
| 12,000 | 8,500 | ||
| Costs during April | |||
| Direct materials used | 133,000 | 220,000 | $ 100,000 |
| Direct labor used | 100,000 | 154,000 | 100,000 |
| Overhead applied | ? | ? | ? |
| Status on April 30 | Finished (sold) | Finished (unsold) | In process |
Additional Information
- Raw Materials Inventory has a March 31 balance of $83,000.
- Raw materials purchases in April are $550,000, and total
factory payroll cost in April is $377,000. - Actual overhead costs incurred in April are indirect materials, $54,000; indirect labor, $23,000; factory rent, $36,000; factory utilities, $20,000; and factory equipment depreciation, $56,000.
- Predetermined overhead rate is 50% of direct labor cost.
- Job 306 is sold for $670,000 cash in April.
5-a. Compute gross profit for April.
5-b. Show how the three inventory accounts are reported on the April 30
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