ACCT 2230 Chapter Notes - Chapter 3: Fixed Cost, Ob River

20 views2 pages

coralpanda340

20 Oct 2014

School

Department

Course

Professor

For unlimited access to Textbook Notes, a Class+ subscription is required.

Document Summary

Absorption costing or full costing: a costing method that includes all manufacturing costs direct materials, direct labour, and both variable and fixed cost of a finished unit of product. Process costing system: a costing system used in those manufacturing situations when a single, homogeneous product flows in a continuous stream out of the production process. Job-order costing system: a costing system used in situations where many different products, jobs, or services are produced each period. Bill of materials: a record that lists the type and quantity of each major item of the materials required to make a product. Materials requisition form: a detailed source document that specifies the type and quantity of materials that are to be drawn from the storeroom and identifies the job to which the costs of materials are to be charged. Job cost sheet: a form prepared for each job that records the materials, labour, and overhead costs charged to the job.

Related Questions

Process costing differs from job order costing in the way costsare accounted for. Share your thoughts about the accountingdifferences in process costing versus job order costing, andexplain how manufacturing costs are accounted for in processcosting. Further explain why the cost per equivalent unit aredetermined separately for direct materials and for conversion costsunder different methods of determining the cost of completed andtransferred out units and the cost of ending work in processinventory. Additionally, discuss the type of production mostsuitable to employ a process costing system by providing anexample.

amaranthworm158

Identify each statement as true or false. If false, indicate howto correct the statement.

1. Process cost systems are used to apply costs to similarproducts that are mass-produced in a continuous fashion.
2. A process cost system is used when each finished unit isindistinguishable from another.
3. Companies that produce soft drinks, motion pictures, andcomputers chips would all use process cost accounting.
4. In a process cost system, costs are tracked by individualjobs.
5. Job order costing and process costing track differentmanufacturing costs elements.
6. Both job order costing and process costing account for directmaterials, direct labor, and manufacturing overhead.
7. Costs flow through the accounts in the same basic way for bothjob order costing and process costing.
8. In a process cost system, only one work in process account isused.
9. In a process cost system, costs are summarized in a job costsheet.
10. In a process cost system, the unit cost is total manufacturingcosts for the period divided by the units produced during theperiod.

byzantiumpanda529

The Polaris Company uses a job-order costing system. The following transactions occurred in October:

a. Raw materials purchased on account, $210,000.

b. Raw materials used in production, $188,000 ($150,400 direct materials and $37,600 indirect materials).

c. Accrued direct labor cost of $48,000 and indirect labor cost of $20,000.

d. Depreciation recorded on factory equipment, $104,000.

e. Other manufacturing overhead costs accrued during October, $129,000

f. The company applies a manufacturing overhead cost to production using a predetermined rate of $7 per machine-hour. A total of 76,100 machine-hours were used in October.

g. Jobs costing $513,000 according to their job cost sheets were completed during October and transferred to Finished Goods.

h. Jobs that had cost $449,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 24% above cost.

Required:

1. Prepare journal entries to record the transactions above.

2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account record the transactions given above. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $37,000

erincrab353

ACCT 2230 Chapter Notes - Chapter 3: Fixed Cost, Ob River

Document Summary

Get access

Related Documents

ACCT 2230 Chapter 3: Chapter 3.docx

ACCT 2230 Chapter Notes - Chapter 5: Total Absorption Costing, European Cooperation In Science And Technology

ACCT 2230 Lecture Notes - Lecture 5: Cost Driver, European Cooperation In Science And Technology, Enterprise Resource Planning

Related Questions