Penn Company uses a job order cost accounting system. In the last month, the system accumulated labor time tickets totaling $32,000 for direct labor and $6,400 for indirect labor. These costs were accumulated in Factor Payroll as they were paid. Which entry should Penn make to assign the Factory Payroll? General Journal Debit Credit (A) Payroll Expense 38,400 Cash 38,400 32,000 Payroll Expense Factory Overhead 6,400 Factory Payroll 38,400 (C) Goods in Process Inventory 32,000 Factory Overhead 6,400 Factory Payroll 38,400 D) Goods in Process Inventory 32,000 Factory Overhead 6,400 Accrued Wages Payable 38,400 E) Goods in Process Inventory 38,400 Factory Payroll 38,400 (B)
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.
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