Distinguishing between job order costing and process costing
Would the following companies most likely use job order costing or process costing?
f. A custom home builder
A custom home builder is most likely to use a job-order costing system.
Costing is defined as the total expenses incurred by the company in producing the product or service. It is determined by the management of the company to decide the selling price of the product.
Custom home builders work on a contract basis and manufacture the building according to the customer's demand. Hence, they use the job order costing system to determine the project's total cost.
June production generated the following activity in Bentley Chassis Company’s Work-in-Process Inventory account:
June 1 balance
Direct materials used
Direct labor assigned to jobs
Manufacturing overhead allocated to jobs
Additionally, Bentley Chassis has completed Jobs 142 and 143, with total costs of
$37,000 and $48,000, respectively.
3. Prepare the journal entry to record the sale on account of Job 143 for $63,000.
Also, prepare the journal entry to record Cost of Goods Sold for Job 143.
Selected cost data for Classic Print Co. are as follows:
Estimated manufacturing overhead cost for the year
Estimated direct labor cost for the year
Actual manufacturing overhead cost for the year
Actual direct labor cost for the year
3. Use a T-account to determine the amount of underallocated or overallocated
Question: The following information pertains to Smith Company, which you worked with previously in this chapter:
11. Smith Company completed jobs that cost $25,000 to manufacture. Record the journal entry.
12. Smith Company sold jobs to customers on account for $52,000 that cost $22,000 to manufacture. Record the journal entries.
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