251 Chapter 8 Accounting for Factory Overhead hesis es ompany uses a job costing system and applies overhead to products on the basis of direct labor cost. Job no. 75, the only job in process on January 1, nao un Tollowing costs assigned as of that date: direct materials, P40,000; direct labor, P80,000; and factory overhead, P120.000. The following selected costs were incurred during the year 2016: Traceable to jobs: 178,000 Direct materials Direct labor Not traceable to jobs: Factory materials and supplies Indirect labor P. 350,000 P523,000 46,000 235,000 73,000 29,000 76,000 Plant maintenance Depreciation on factory equipment Other factory costs 459,000 Marvin's profit plan for the year included budgeted direct labor of P320,000 and factory overhead of P384,000 15. Assuming no work-in-process on Dec. 31, Marvin's overhead for the year was a. P11,000 over-applied b. P24,000 over-applied c. P39,000 under-applied d. P11,000 under-applied
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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