Job Order Costing System

Topics: Manufacturing, Industry, Finished good Pages: 2 (291 words) Published: July 26, 2013
1.Describe when it is appropriate for a company to use a job-order costing system. Answer
Job order cost system provides per unit cost of manufactured products. Job order cost system is used by the companies that manufacture custom products for customers or batches of similar products. Job order cost system is used in the companies that offer many different products or services to its customers. Example Industries where job order cost system is used are Furniture manufacturing, Apparel manufacturing, commercial aircraft manufacturing, hospitals, and law firms. 2. Calculate the balance in CompuFurn, Inc.'s Work-in-Process Inventory account as of December 31.

Solution

Work In Process
Job No.CC723CH291PS812DS444
DescriptionComputer CadyChairPrinter StandDesksTotal
UnitsAccumulated CostUnitsAccu CostUnitsAccu CostUnitsAccu CostUnitsAccu Cost Balance at Nov 30 20,000 $ 900,000 15,000 $ 431,000 25,000 $ 250,000 - $ - 60,000 $ 1,581,000 Add: Raw Material in Dec 51,000 3,000 124,000 5000 65,000 $ 243,000 Add : Purchase Parts in Dec 104,000 10,800 87,000 187,000 $ 388,800 Add : Labor Cost in Dec 122,400 43,200 200,500 138,000 $ 504,100 Add: Indirect labor in Dec 8,120 2,520 10,010 8,750 $ 29,400 Add: Supervision in Dec 15,909 4,937 19,611 17,143 $ 57,600 Total Work in process 20,000 $ 1,201,429.00 15,000 $ 495,457 25,000 $ 691,121 5,000 $ 415,893...
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