June 1 balance Direct materials used Direct labor assigned to jobs Manufacturing overhead allocated to jobs $ 36,000 32,000 40,000 28,000
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.
Completing and selling jobs
June production generated the following activity in Bentley Chassis Companys Work-in-Process Inventory account.
Additionally Bentley Chassis has completed Jobs 142 and 143, with total costs of $37,000 and $48,000 respectively.
Requirements
- Prepare the
journal entry for production completed in June. - Open a T-account for Work-in-Process Inventory
Post the journal entry made in Requirement 1. Compute the ending balance in the Work-in-Process Inventory account on June 30. - Prepare the journal entry to record the sale on account of Job 143 for $63,000. Also, prepare the journal entry to record Cost of Goods Sold for Job 143.
- What is the gross profit on job 143?
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