Cool Sun produces awnings and screens. Prepare journal entries to reflect the following transactions. After you complete the entries, determine the amount to include in raw materials, work in process, and finished goods. Aug. 4, 20X5 Aug. 8, 20X5 Aug. 8, 20X5 Aug. 9, 20X5 Aug. 10, 20X5 Purchased fabric and aluminum to be used in the manufacturing process. The purchase price was $4,000, on account. Transferred 60% of the raw materials purchased on August 4 into production. Incurred direct labor costs of $3,000. Factory overhead is applied at 40% of the direct labor cost. Transferred completed awnings with total assigned of $4,400 to finished goods. Sold and delivered half of the finished goods (from August 9) to a customer for $4,000 cash.
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.
- In the end the Raw Materials account would contain an ending balance of:
2. In the end Work-in-process account would contain an ending balance of:
3. In the end, the Finished Goods Inventory account would contain an ending balance of:
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
