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Job Costing Process with Journal Entries | Management Accounting

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Added on  2020-06-04

Job Costing Process with Journal Entries | Management Accounting

   Added on 2020-06-04

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Management Accounting
Job Costing Process with Journal Entries | Management Accounting_1
TABLE OF CONTENTSa. Describing circumstances when a job order costing system proves to be suitable..................3b) Presenting Work in Process (WIP) Account of Turramurra Furniture at 30 June 2017.........3(c) Calculate the cost of the chairs in the Finished Goods Inventory..........................................3(d) Computation of over or under-applied overhead for the year................................................4(e) Outline two different treatments for the over or under-applied overhead balances under joborder costing system....................................................................................................................6(f) Presenting action that needs to be taken when under or over-application of overhead ismaterial........................................................................................................................................6(g) Suggesting firm whether it should undertake ABC system or not.........................................6REFERENCES................................................................................................................................8
Job Costing Process with Journal Entries | Management Accounting_2
a. Describing circumstances when a job order costing system proves to be suitable From assessment, it has identified that job order costing system is suitable for themanufacturing companies which produces and offer different types of products. Specifically,there are mainly three systems on that considered under job costing system namely material,labor and overhead (Job costing, 2017). It is suitable for the firm whose manufactured productsare different fron each other. In the context of Turramurra Furniture, job costing system ishighly suitable because it manufactures and offers different types of products or services tocustomers include storage equipment, printer stand, chair & desk. Under job costing, by usingfollowing formula firm can determine per unit cost such as:Unit cost = Total cost applicable to job / Number of units in the jobb) Presenting Work in Process (WIP) Account of Turramurra Furniture at 30 June 2017Calculation of WIPParticularsFigures ( in $)Opening stock (in process)1591000raw material consumed43000direct labor cost591100factory overhead8700023121000Less: closing stock31800WIP23,08,9200(c) Calculate the cost of the chairs in the Finished Goods Inventory Computation of unit cost when quantity of chair is 15000: ParticularsFigures ( in$)Figures ( in$)Work in process inventory431000Add:Direct material 13800Direct labor 43200Manufacturing overhead (4400 * 5) 2200079000
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