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Comparison of Job Costing with Process Costing

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Added on  2020-06-05

Comparison of Job Costing with Process Costing

   Added on 2020-06-05

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ACCOUNTING
Comparison of Job Costing with Process Costing_1
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK...............................................................................................................................................1A). Describing situation where job costing system proves to be suitable..............................1B). Determining work-in-progress of Turramurra Furniture at 30th June 2017......................2C). Calculating cost of chairs in the finished inventory.........................................................2D): Computing over or under applied overhead for the period of one year...........................3E. Suggesting corrective measure for the situation of over-applied overhead.......................4F. Stating approach that company should use to adjust the over or under application ofoverhead.................................................................................................................................5G. Suggesting Turramurra Furniture whether it should undertake activity based budgetingtechnique or not......................................................................................................................5CONCLUSION................................................................................................................................7REFERENCES................................................................................................................................8
Comparison of Job Costing with Process Costing_2
INTRODUCTIONAccounting is the tool which is used by each and every company for having systematicrecords of all transactions. There is a strong need to adopt the systematic accounting reportingstandards by organisations so that they can be safeguard from prosecution. This is the only toolby which a company could get sustainable development. The present report is based onTurramurra Furniture which will provide deeper insight about the situations in which the systemof job costing needs to be undertaken. Besides this, it will shed light on the concept or aspectsunder and over applied overhead. Further, report also depicts the manner in which activity basedcosting technique helps in taking suitable decision regarding cost. TASK A). Describing situation where job costing system proves to be suitable Job order costing is a normal way that been used by company producing diverse range ofproducts. This is one among mostly implemented system of costing in production area and is alsoused in service industry. Mostly, production organisation implementes job order costing with amotive to achieve orders for customised goods and services. These customized orders are alsoknown as jobs or batches. For example, A clothing company might attain an order for men shirtswith specific size, colour, and design. When Turramurra Furniture Company accept jobs for diverse goods, the assignment of costto goods become a complicated task. Under these situations, cost record for every individual jobis kept as each job has a diverse good and henceforth, diverse costs is linked to it.Per unit cost of a specific job is calculated by dividing the total cost allocated by number ofunits under. Per unit cost formula is provided as below:Per unit cost= Total cost applicable to job/ Number of units in the jobJob order costing is mostly implemented by organisations all around the globe. A job costsheet segregate production projects into three types of costs. These are direct material, directlabour and manufacturing overheads. Direct material is related to the material required toproduce the project. Direct labour is the amount of the manpower cost which is implemented tofulfil the project (Mu, Jiang and Leng, 2017). Manufacturing overheads are the third one whichis the indirect costs connected to manufacturing of goods.1
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