BJ Manufacturing Company uses Job Order Costing system to accumulate production costs. At the beginning of the year, the balances of the inventory accounts are as follows: P168,000 210,000 Raw Materials Inventory Work in Process Inventory Job 101... Job 102 ... Finished Goods Inventory Job 005 .. Job 006 ... P105,000 105,000 182,000 P 85,000 97,000 The summaries of transactions for the year are as follows: (a) Raw Materials costing P826,000 were purchased on account. (b) Materials issued to production, P785,000 distributed as follows: Job 101 P180,000 Job 102 P125,000 Indirect balance Job 103 P150,000 Job 104 P205,000 Job 105 P95,000 (c) Heat, light and power, factory plant, for the year was P116,000. (d) Depreciation for factory plant for the year, P190,000 (e) Marketing and administrative expenses, P250,000 (f) Production wages for the year was P1,250,000 of which 20% is for indirect laborers. The direct wages were distributed as: Job 101, 15%; Job 102, 20%; Job 103, 25%; Job 104, 30%; Job 105, 10%; (h) 80% of direct labor cost was applied as overhead to the jobs. (1) Advertising costs for the year was P56,000 G) Expired insurance was P50,000 of which, 80% is for the factory. (k) The finished goods stock at the beginning of the year were sold on account at cost plus 40% mark up (1) Miscellaneous factory overhead costs incurred were P500,000. (m) Job 105 was unfinished at the end of the year. Jobs 103 and 104 were delivered to the customer at cost plus 40% mark up on cost
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.
BJ Manufacturing Company uses
Prepare job cost sheets for the jobs in process.
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