Redwoods Company designs and builds exotic furniture for individual customers. On March 1, there were two jobs in process: Job 400 with a beginning balance of $23,000 and Job 402 with a beginning balance of $6,000. Overhead costs are applied by using a rate of 50% of direct labor costs. Both jobs are unfinished on March 31. Data on March costs for both the jobs are as follows: Job 400 Job 402 Direct materials $6,000 $ 10,000 Direct labor cost 4,000 13,000 What is the total of the work-in-process account on March 31? a.$38,000 b.$58,490 c.$45,000 d.$70,500 e.None of these choices are correct.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Redwoods Company designs and builds exotic furniture for individual customers. On March 1, there were two jobs in process: Job 400 with a beginning balance of $23,000 and Job 402 with a beginning balance of $6,000.
Overhead costs are applied by using a rate of 50% of direct labor costs. Both jobs are unfinished on March 31. Data on March costs for both the jobs are as follows:
Job 400 Job 402 Direct materials $6,000 $ 10,000 Direct labor cost 4,000 13,000
What is the total of the work-in-process account on March 31?a.$38,000b.$58,490c.$45,000d.$70,500e.None of these choices are correct.
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