Job vs. Process Costing\t\u00a0 \u00a0Product (service) costing systems are customized to provide accurate and timely\t\u00a0 \u00a0cost data. A company should select a costing system that is appropriate for its\t\u00a0 \u00a0production process. The following is a list of different organizations and selected\t\u00a0 \u00a0products or services they provide. Indicate whether each of the preceding\t\u00a0 \u00a0organizations would most likely choose\u00a0job costing\u00a0or\u00a0process costing.\tJob Costing\t\u00a0 \u00a0 \u00a0Love’s Pottery Barn had the following costs for June:\t\u00a0 \u00a0 \u00a0Direct Labor \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0 $400\t\u00a0 \u00a0 \u00a0Manufacturing Overhead \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd$375\t\u00a0 \u00a0 \u00a0Beginning work in process \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0\u00a0 $0\t\u00a0 \u00a0 \u00a0Ending work in process \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0 $0\t\u00a0 \u00a0 \u00a0Costs of goods manufactured \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd $1,050\t\u00a0 \u00a0 \u00a0Beginning finished goods \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0 $2,450\t\u00a0 \u00a0 \u00a0Ending finished goods \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd $3,400\tWhat was the cost of direct material used during June?\tDirect Labor vs. Indirect Labor\t\u00a0 \u00a0 \u00a0Jim Wilson is a typical manufacturing employee who commonly works 40 hours\t\u00a0 \u00a0 \u00a0per week and is paid $14 per hour. During the last pay period, Jim performed the\t\u00a0 \u00a0 \u00a0the following activities:\t\u00a0 \u00a0 \u00a0Assembling products \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0 29.5 hours\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0Cleaning his work area \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0 5.0 hours\t\u00a0 \u00a0 \u00a0Attending a workplace safety meeting \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd 2.5 hours\t\u00a0 \u00a0 \u00a0Talking with a supervisor about football \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 1.0 hours\t\u00a0 \u00a0 \u00a0Giving a tour of the plant to schoolchildren \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0 2.0 hours\tJim’s employer uses job costing to measure and track production costs. The company is\tvery concerned with maintaining accurate cost data. Determine the amount of labor costs\tthat should be allocated to direct labor and indirect labor as manufacturing overhead.\tWalter Meyer Productions had the following costs for March:\t\u00a0 \u00a0 \u00a0 \u00a0Purchases of direct materials \ufffd\u00a0\u00a0\u00a0 \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0$30,000\t\u00a0 \u00a0 \u00a0 \u00a0Indirect Labor \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0\u00a0 $20,000\t\u00a0 \u00a0 \u00a0Ending direct materials inventory \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0 \ufffd \ufffd\u00a0$10,000\t\u00a0 \u00a0 \u00a0Beginning direct materials inventory \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0\u00a0\u00a0 $0\t\u00a0 \u00a0 \u00a0Total manufacturing costs \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0 $115,000\t\u00a0 \u00a0 \u00a0Direct Labor \ufffd \ufffd\u00a0\u00a0\u00a0\u00a0 \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd \ufffd\u00a0$25,000\tHow much manufacturing overhead was incurred during March?\tIdentification of Cost Drivers\t\u00a0 \u00a0 \u00a0Overhead costs are rarely directly linked to the production of a specific product\t\u00a0 \u00a0 \u00a0or group of products. Generally, overhead costs are only indirectly linked to\t\u00a0 \u00a0 \u00a0production, so they must be allocated. Understanding the relationship between\t\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0overhead costs and production activities is challenging for most businesses. Consider\t\u00a0 \u00a0 \u00a0the following:\tOverhead Costs, Cost Pools, Cost Drivers\t\u00a0 \u00a0 \u00a0 \u00a0The following statements describe various aspects of overhead costs and the\t\u00a0 \u00a0 \u00a0 \u00a0roles of cost pools and cost drivers in the allocation of overhead.\tCase 44<\/p>\n","protected":false},"excerpt":{"rendered":"
Job vs. Process Costing \u00a0 \u00a0Product (service) costing systems are customized to provide accurate and timely \u00a0 \u00a0cost data. A company should select a costing system that is appropriate for its \u00a0 \u00a0production process. The following is a list of Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-201528","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/201528","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=201528"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/201528\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=201528"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=201528"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=201528"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}