Question
In: Accounting
1. In a job-order cost system, what would back up the balance in the Work in...
1. In a job-order cost system, what would back up the balance in the Work in Process account?
2. What are the differences between actual costing system and normal costing system?
Solutions
Expert Solution
Answer for 1)
In job order costing the balance in the work in process account will be transferred to Finished goods accounts for which the the costs of direct materials,direct labour and other overheads of remaining portion will be added.
Answer for 2)
1)The primary difference of actual and normal costing system is in actual costing system the actual costs of direct materials, direct labour and manufacturing Overheads is recorded as cost but when it comes to normal costing system the predetermined rates are used for mostly manufacturing overhead as it easy to determine the actual costs of material and labor which is not in the case of manufacturing overhead.
2)The second major difference is that in normal costing system the variation of overhead costs is almost negligable as it uses predetermined rate but when it comes to actual costing system the rate may vary due to price hikes and drops in the overheads used.
ekkarill92 answered 1 year agoRelated Solutions
What is a job order cost system? Describe a situation in which you would use job...
What is a job order cost system? Describe a situation in which
you would use job order cost information. What type of information
is useful in making your decision?
Job-Order Cost Sheets, Balance in Work in Process and Finished Goods Prull Company, a job-order costing...
Job-Order Cost Sheets, Balance in Work in Process and
Finished Goods
Prull Company, a job-order costing firm, worked on three jobs in
July. Data are as follows:
Job
86
Job
87
Job
88
Balance, July 1
$21,370
$6,280
$0
Direct materials
$10,510
$12,350
$16,190
Direct labor
$16,040
$12,240
$24,030
Machine hours
500
290
980
Overhead is applied to jobs at the rate of $17 per machine hour.
By July 31, Jobs 86 and 88 were completed. Jobs 82 and 86...
Stine Company uses a job order cost system. On May 1, the company has a balance...
Stine Company uses a job order cost system. On May 1, the
company has a balance in Work in Process Inventory of $ 3,910 and
two jobs in process: Job No. 429 $ 2,460, and Job No. 430 $ 1,450.
During May, a summary of source documents reveals the
following.
Job Number
Materials
Requisition Slips
Labor Time
Tickets
429
$ 2,900
$ 2,060
430
3,940
3,130
431
4,670
$ 11,510
7,760
$ 12,950
General use
950
1,370
$ 12,460
$...
Ivanhoe Company uses a job order cost system. On May 1, the company has a balance...
Ivanhoe Company uses a job order cost system. On May 1, the
company has a balance in Work in Process Inventory of $3,940 and
two jobs in process: Job No. 429 $2,160, and Job No. 430 $1,780.
During May, a summary of source documents reveals the
following.
Job Number
Materials
Requisition Slips
Labor Time
Tickets
429
$2,770
$2,100
430
3,910
3,300
431
4,920
$11,600
8,200
$13,600
General use
940
1,460
$12,540
$15,060
Ivanhoe Company applies manufacturing overhead to jobs at...
Cullumber Company uses a job order cost system. On May 1, the company has a balance...
Cullumber Company uses a job order cost system. On May 1, the
company has a balance in Work in Process Inventory of $3,770 and
two jobs in process: Job No. 429 $2,430, and Job No. 430 $1,340.
During May, a summary of source documents reveals the
following.
Job Number
Materials
Requisition Slips
Labor Time
Tickets
429
$2,940
$2,300
430
3,850
3,400
431
4,680
$11,470
8,200
$13,900
General use
940
1,570
$12,410
$15,470
Cullumber Company applies manufacturing overhead to jobs at...
Stine Company uses a job order cost system. On May 1, the company has a balance...
Stine Company uses a job order cost system. On May 1, the
company has a balance in Work in Process Inventory of $3,900 and
two jobs in process: Job No. 429 $2,450, and Job No. 430 $1,450.
During May, a summary of source documents reveals the
following.
Job Number
Materials
Requisition Slips
Labor Time
Tickets
429
$3,000
$2,200
430
3,730
3,400
431
4,710
$11,440
8,200
$13,800
General use
980
1,330
$12,420
$15,130
Stine Company applies manufacturing overhead to jobs at...
Stine Company uses a job order cost system. On May 1, the company has a balance...
Stine Company uses a job order cost system.
On May 1, the company has a balance in Work in Process Inventory
of $3,500 and two jobs in process: Job No. 429 $2,000, and
Job No. 430 $1,500.
During May, a summary of source documents reveals the
following.
Job
Number
Materials Requisition Slips
Labor Time Tickets
429
2,500
1,900
430
3,500
3,000
431
4,400
10,400
7,600
12,500
General use
800
1,200
11,200
13,700
Stine Company applies manufacturing overhead to jobs at...
Stine Company uses a job order cost system. On May 1, the company has a balance...
Stine Company uses a job order cost system. On May 1, the
company has a balance in Work in Process Inventory of $ 4,130 and
two jobs in process: Job No. 429 $ 2,370, and Job No. 430 $ 1,760.
During May, a summary of source documents reveals the
following.
Job Number
Materials
Requisition Slips
Labor Time
Tickets
429
$ 3,090
$ 2,080
430
3,960
3,310
431
4,820
$ 11,870
8,180
$ 13,570
General use
960
1,320
$ 12,830
$...
Darden Manufacturing uses a job order cost accounting system. On April 1, the company has Work...
Darden Manufacturing uses a job order cost accounting system. On
April 1, the company has Work in Process Inventory of $7,600 and
two jobs in process: Job No. 221, $3,600, and Job No. 222, $4,000.
During April, a summary of source documents reveals the following:
For Materials Requisition Slips Labor Time Tickets Job. No. 221
$2,200 $3,600 222 1,700 3,200 223 2,400 2,900 224 2,100 2,800
General use 600 400 Totals $9,000 $12,900 Darden applies
manufacturing overhead to jobs at...
Entries for Costs in a Job Order Cost System Velasco Co. uses a job order cost...
Entries for Costs in a Job Order Cost System
Velasco Co. uses a job order cost system. The following data
summarize the operations related to production for July:
Materials purchased on account, $695,900
Materials requisitioned, $584,560, of which $75,990 was for
general factory use
Factory labor used, $716,780, of which $136,190 was
indirect
Other costs incurred on account for factory overhead, $167,020;
selling expenses, $257,480; and administrative expenses,
$153,100
Prepaid expenses expired for factory overhead, $32,010; for
selling expenses, $27,140;...
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