Schrager Company has two production departments: Cutting and Assembly. July 1 inventories are Raw Materials $4,200, Work in Process-Cutting $2,900, Work in Process-Assembly $10,600, and Finished Goods $31,000. During July, the following transactions occurred. 1. 2. 3. Incurred $70,000 of manufacturing overhead; $40,000 was paid and the remainder is unpaid. Requisitioned materials for Cutting $15,700 and Assembly $8,900. Used factory labor for Cutting $33,000 and Assembly $27,000. Applied overhead at the rate of $18 per machine hour. Machine hours were Cutting 1,680 and Assembly 1,720. Transferred goods costing $67,600 from the Cutting Department to the Assembly Department. 8. Transferred goods costing $134,900 from Assembly to Finished Goods. Sold goods costing $150,000 for $200,000 on account. 4. 5. 6. 7. Purchased $62,500 of raw materials on account. Incurred $60,000 of factory labor. (Credit Wages Payable.) 9.
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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