Cullumber Company uses a job order cost system and applies overhead to production on the basis of direct labor costs.
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.
Cullumber Company uses a
During the month of January, Cullumber Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were sold on account during the month for $102,480 and $132,720, respectively. The following additional events occurred during the month.
| 1. | Purchased additional raw materials of $75,600 on account. | |||||||||||||||||||||
| 2. | Incurred |
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| 3. | Incurred manufacturing overhead costs as follows: |
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| 4. | Assigned direct materials and direct labor to jobs as follows. | |||||||||||||||||||||
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| 5. | Assigned indirect materials of $14,280 and indirect labor of $16,800. |
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