Q28PGA_a - Horngren'S Financial And Managerial Accounting

Question

:Clement Manufacturing makes carrying cases for portable electronic devices. Its costing records yield the following information:

Job No.	Date	Total cost of Job at October 31	Total manufacturing costs added in November
Started	Finished	Sold
1	10/03	10/12	10/13	\(1,300
2	10/03	10/30	11/01	1,400
3	10/17	11/24	11/27	1,000	\)900
4	10/29	11/29	12/03	1,200	1,200
5	11/08	11/12	11/14		650
6	11/23	12/06	12/09		500

Requirements

1. Which type of costing system is Clement using? What piece of data did you base your answer on?

Step-by-Step Solution

Answer

Clement manufacturing uses the job orer costing system for determining the cost of each job. It is so because the total costing of each job is different. When the costing of different job is different, then the company uses the job order costing system.

Step 1: Costing system

Costing system means the system uses by the companies for determining the values of the products manufactured by them. It is classified in category such as the job order costing system and the process costing system.

Step 2: Classifcation of costing system used by clement manufacturing

Job order costing system is used by the clement manufacturing. The companies which are working on job basis determine the cost on different job type basis. Hence, the cost is being determined by Clement by using job order costing system.