Prepare job cost record Global Tire manufactures tires for all-terrain vehicles. Global uses job costing and has a perpetual inventory system. On September 22, Global received an order for 100 TX tires from ATV Corporation at a price of $52 each. The job, assigned number 298, was promised for October 10. After purchasing the materials, Global began production on September 30 and incurred the following direct labor and direct materials costs in completing the order: Global allocates manufacturing overhead to jobs on the basis of the relation between expected overhead costs ($394,000) and expected direct labor hours (18,000). Job 298 was completed on October 3 and shipped to ATV on October 5.
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.
⦁ Prepare job cost record
Global Tire manufactures tires for all-terrain vehicles. Global uses
On September 22, Global received an order for 100 TX tires from ATV Corporation at a price of $52 each. The job, assigned number 298, was promised for October 10.
After purchasing the materials, Global began production on September 30 and incurred the following direct labor and direct materials costs in completing the order:
Global allocates manufacturing
Requirements:
1. Prepare a job cost record for Job 298.
2. Calculate the total profit and the per-unit profit for Job 298.
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