1. What do you think some downsides and (if any) upsides of not knowing manufacturing costs?
2. How does knowing the cost of a company's goods help in establishing cost control measures?
3. Which do you think is more important, Job Costing or Process Costing?
4. Couldn't some food companies fall under process costing as they are making the same product in bulk?
1. The biggest downside of not knowing manufacturing costs is that you do not know the product cost. If you do not know the product cost, you end up over-costing or under-costing the product, thereby arriving at incorrect product prices. If your pricing is too low, your firm compromises on profitability. If your pricing is too high, you cannot compete in the market, and your firm loses out on market share.
2. Standard costs can be set against which actual costs can be compared. In case of variances, the originating causes are looked into for corrective action and cost control. Value engineering can be done to eliminate unnecessary costs and wastage. This can lead to substantial cost control. Unless you know the cost of your products, you cannot carry out these measures,
3. Both are equally important, depending on the type of industry.
Job costing is important for industries involved in making customized products, each of which has its own specifications. For example, jewellery, customized furniture, customized electronic equipment, tax consulting, management consulting etc. They are not produced en mass, and are not interchangeable. Accounting is done for each job separately.
Process costing on the other hand is applied in industries producing homogeneous products in bulk, and in industries where manufacturing processes are involved, and the output of each subsequent process is distinguishable from the output of each prior process. Examples: Bakery, Pharmaceuticals, Candy, Cement, Refining Crude Oil etc.Accounts are maintained for each process.
4. Yes. Companies manufacturing fruit juice, carbonated beverages, candy, bread, cookies, ice cream etc just to name a few fall under process costing, as the products are manufactured in bulk with common specifications, involving multiple processes to convert the raw materials into finished products.
1. What do you think some downsides and (if any) upsides of not knowing manufacturing costs?...
Explain in your own words what Job Costing and Process Costing are. Why do we have any costing systems at all? What is your plain language definition of Job Costing and Process Costing? How are they different? How are they the same? Give two real-life examples of actual products that are likely costed using job costing and give two examples of actual products that likely use process costing. How would a marketing professional or a non-accountant manager benefit from knowing...
What do you think are some advantages for using the ABC method versus a single plant-wide rate or multiple departmental overhead rates. Why would an activity-based costing (ABC) system appeal to some companies and not all companies. Provide at least 3 examples of companies you think would and wouldn't want to use the ABC method.
I do not know how to do 7b. Question 1-7a are listed below. Thank you!!! Question: Cole Company uses normal costing in its job-costing system. Partially completed T-accounts and additional information for Cole for 2020 are as follow: T-accounts X Х Direct Materials Control 1-1-2020 38,000 237,000 Finished Goods Control 1-1-2020 14,000 884,960 Work-in-Process Control 1-1-2020 46,000 Dir. Manuf. labor 357,000 Manufacturing Overhead Allocated 134,000 Manufacturing Overhead Control 517,000 926,270 Cost of Goods Sold Print Done More Info X Х...
What are the three production/manufacturing cost? Provide an example of each cost. Do you think the costs are equally important or is there one cost more important than the other two? Explain your answer to this question.
Do you think it is important to provide legal protection for whistleblowers on the job? What does whistleblowing have to do with a company's culture?
Assume that a company closes any remaining balances in the manufacturing overhead control account to the cost of goods sold account. If the company has over applied its manufacturing overhead the company would record which of the following entries: DR cost of goods sold CR manufacturing overhead control DR work-in-process CR cost of goods sold DR manufacturing overhead control CR cost of goods sold DR cost of goods sold CR cost of goods manufactured 2.The Whitestone...
what do you see as the rationale for consumer-driven health care? Why do you think some do not think it is important?
4-28 Accounting for manufacturing overhead. Creative Woodworking uses normal costing and allocates man ufacturing overhead to jobs based on a budgeted labor-hour rate and actual direct labor hours. Under or overal located overhead, it immaterial, is written off to Cost of Goods Sold. During 2017, Creative recorded the following Budgeted manufacturing overhead costs Budgeted direct labor-hours Actual manufacturing overhead costs Actual direct labor-hours S4,140,000 180,000 54.337,000 189.000 Required 1. Compute the budgeted manufacturing overhead rate 2. Prepare the summary journal...
1. Compute the budgeted manufacturing overhead rate for 2017. 2. Compute the under- or overallocated manufacturing overhead of Home Radiator in 2017. Dispose of this amount using the following: a. Write-off to Cost of Goods Sold b. Proration based on ending balances (before proration) in Work-in-Process Control, Finished Goods Control, and Cost of Goods Sold c. Proration based on the overhead allocated in 2017 (before proration) in the ending balances of Work-in-Process Control, Finished Goods Control, and Cost of Goods...
Match each term with the explanation. Averages manufacturing costs across all units produced so that each identical unit bears the same cost Process of dividing the total manufacturing overhead among the jobs produced during the year Used to accumulate direct materials, direct labor and manufacturing overhead allocated to a job Predetermined manufacturing overhead rate multiplied by actual amount of allocation base used by job Account credited when recording the use of direct labor on jobs Account credited when finished goods...