Taylor Tackers uses process costing. It produces a tacker used by movers to seal boxes. Taylor has almost no inventories of material, work in process, or finished goods. The balances are so small that the company treats them as zero for purposes of its accounting reports. During July, the company produced and shipped 13,000 tackers at a cost of $13.50 per tacker. The cost consisted of 20 percent material cost, 25 percent labor cost, and 55 percent manufacturing overhead. Prepare journal entries to record the following: a. Issuance of direct material Cost of direct labor accrued Application of manufacturing overhead d. Completion of units in process and their transfer to Finished Goods Cost of goods sold b. C. 0.
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.
Step by step
Solved in 3 steps
