Answer:
Required 1 ; Journals
Work In Process : Grinding Department $ 128,000 (debit)
Work In Process : Molding Department $ 128,000 (credit)
<em>Being transfer of costs from Molding to Grinding Department</em>
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Work In Process : Molding Department $ 128,000 (debit)
Work In Process : Grinding Department $ 128,000 (credit)
<em>Being transfer of costs from Grinding to Molding Department</em>
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Finished Goods Account $40,000 (debit)
Work In Process : Finishing Department $40,000 (credit)
<em>Being transfer of costs from Finishing department to finished goods account</em>
Required 2 : Difference
<u>Job Order Costing </u>
Each production is unique and there may be no transfers to and from other departments. The is no inventory from previous processes as this is unique to the job order.
<u>Process Costing (Currently in use)</u>
There are transfers from and to other departments. Production is in sequence. For each departments we may also have inventories
Explanation:
<u>Finishing Department Costs Calculation</u>
Direct materials $17,200
Direct labor $11,600
Applied overhead $11,200
Total $40,000
Difference :
You should be able to see that the Journal entries above depicts a process costing system. Now provide reasons why this system differs from the job-order cost system. See the reasons above.
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