Question

In: Accounting

Which type of cost system, process, or job order is best for each of the following:...

Which type of cost system, process, or job order is best for each of the following: Jewelry maker? Give reasons for your answers. In the labor order system, direct labor and factory overhead are paid to individual jobs. How are these treated in the process cost system and why?

Solutions

Expert Solution

Jewellery making is an example of Process Costing.

Reason

Process costing is usually used by those industries who produced goods through different stages.Jewllery is an end product or finished product of a raw material which undergoes different levels of processing.Conversion cost is required for converting raw gold or any metal to jewellery and this is accounted in process costing.Process cost is a period cost. Job Costing is not the right answer as it is the method of costing which is made for any particular job or batch and not for converting process.Job cost is a terminal cost.

The treatment of direct labor and factory overhead in Process Costing

Direct labor and factory overhead are both expenses are written in the debit side of process account.

Direct labor means wages given to the labor who are wholly involved in the process. This wage is apportioned among different process on basis of time spent on each process.This is always debited to process account as it is a direct expense..

Factory overhead are easily identified with the process. They directly attribute to process and thus debited to process account.

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Which type of cost system, process or job order, would be best suited for each of...
Which type of cost system, process or job order, would be best suited for each of the following: (a) TV assembler, (b) building contractor, (c) automobile repair shop, (d) paper manufacturer, (e) custom jewelry manufacturer? Give reasons for your answers. In a job order cost system, direct labor and factory overhead applied are debited to individual jobs. How are these items treated in a process cost system and why? Cite and give credit to the author that you are citing
Two primary Cost Accounting Systems are the job order cost system and the process cost system....
Two primary Cost Accounting Systems are the job order cost system and the process cost system. Provide a brief description of each cost-accounting system.
1. Identify which costing system—job order or process cost— the following companies would primarily use: (a)...
1. Identify which costing system—job order or process cost— the following companies would primarily use: (a) Quaker Oats, (b) Jif Peanut Butter, (c) Gulf Craft (luxury yachts), and (d) Warner Bros. Motion Pictures. 2. What is meant by the term “equivalent units of production”? 3. Soria Co. started and completed 2,000 units for the period. Its beginning inventory is 800 units 25% complete and its ending inventory is 400 units 20% complete. Soria uses the FIFO method to compute equivalent...
Discuss the uses of a process cost system and how it compares to a job order...
Discuss the uses of a process cost system and how it compares to a job order system
Discuss the uses of a process cost system and how it compares to a job order...
Discuss the uses of a process cost system and how it compares to a job order sytem. Can you provide examples of each?
Best Products Inc. Uses a job-order system in which overhead is applied to jobs on the...
Best Products Inc. Uses a job-order system in which overhead is applied to jobs on the basis od DIRECT LABOR COST. At he beginning of the year the inventories are follows: Raw Material ………………………. $ 42,000 Work in Process …………………….   30,000 Finished Goods ……………………… 58,000 During the year, the following transactions were completed: Raw material purchased on account, $ 190,000 (crédito) Raw material requisitioned for use in production, $200,000 ( 80% direct, 20 % indirect ) Cost for employees services...
Which of the following statements about the Work in Process account is true? Both job-order cost...
Which of the following statements about the Work in Process account is true? Both job-order cost and process cost systems use only one Work in Process account. Both job-order cost and process cost systems use several Work in Process accounts. Job-order cost systems use several Work in Process accounts, but process cost systems use only one. Job-order cost systems use only one Work in Process account, but process cost systems use several.
Match each of the following terms with its correct definition: job-order costing system Process-costing system overapplied...
Match each of the following terms with its correct definition: job-order costing system Process-costing system overapplied overhead plantwide overhead rate predetermined overhead rate job-order cost sheet overhead variance applied overhead actual cost system Time Ticket materials requisition form underapplied overhead normal cost sytem direct materials manufacturing overhead A. The amount by which applied overhead exceeds actual overhead B. The job order number, or name, head this form. C. Materials that can be easily and cost-effectively traced to a specific job...
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;...
Entries for Costs in a Job Order Cost System Munson Co. uses a job order cost...
Entries for Costs in a Job Order Cost System Munson Co. uses a job order cost system. The following data summarize the operations related to production for July: Materials purchased on account, $732,780 Materials requisitioned, $615,540, of which $80,020 was for general factory use Factory labor used, $754,760, of which $143,400 was indirect Other costs incurred on account for factory overhead, $175,870; selling expenses, $271,130; and administrative expenses, $161,210 Prepaid expenses expired for factory overhead, $33,710; for selling expenses, $28,580;...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT