Scrap, job costing. The Russell Company has an extensive job-costing facility that uses a variety of metals. Consider eachrequirement independently.1. Job 372 uses a particular metal alloy that is not used for any other job. Assume that scrap is material in amount and soldfor $480 quickly after it is produced. Prepare the journal entry.2. The scrap from Job 372 consists of a metal used by many other jobs. No record is maintained of the scrap generated byindividual jobs. Assume that scrap is accounted for at the time of its sale. Scrap totaling $4,500 is sold. Prepare twoalternative journal entries that could be used to account for the sale of scrap.3. Suppose the scrap generated in requirement 2 is returned to the storeroom for future use, and a journal entry is madeto record the scrap. A month later, the scrap is reused as direct material on a subsequent job. Prepare the journal entriesto record these transactions.
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.
Scrap, job costing. The Russell Company has an extensive
requirement independently.
1. Job 372 uses a particular metal alloy that is not used for any other job. Assume that scrap is material in amount and sold
for $480 quickly after it is produced. Prepare the
2. The scrap from Job 372 consists of a metal used by many other jobs. No record is maintained of the scrap generated by
individual jobs. Assume that scrap is accounted for at the time of its sale. Scrap totaling $4,500 is sold. Prepare two
alternative journal entries that could be used to account for the sale of scrap.
3. Suppose the scrap generated in requirement 2 is returned to the storeroom for future use, and a journal entry is made
to record the scrap. A month later, the scrap is reused as direct material on a subsequent job. Prepare the journal entries
to record these transactions.
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