Capri Boat Corporation uses a job order cost system and applies overhead based on a percentage of direct labor cost. Cost flows through the Work in Process Inventory account during March are given below: Work in Process Beginning Balance 0 Transferred Out 224,500 Direct Materials 56,000 Direct Labor 99,000 Overhead 148,500 Ending Balance 79,000 Only Job #007 was still in process at the end of March and this job had been charged with $26,000 in direct materials cost. The predetermined overhead application rate at Capri Boat is what percentage of direct labor costs?
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.
Capri Boat Corporation uses a
| Work in Process | |||
| Beginning Balance | 0 | Transferred Out | 224,500 |
| Direct Materials | 56,000 | ||
| Direct Labor | 99,000 | ||
| Overhead | 148,500 | ||
| Ending Balance | 79,000 |
Only Job #007 was still in process at the end of March and this job had been charged with $26,000 in direct materials cost.
The predetermined overhead application rate at Capri Boat is what percentage of direct labor costs?
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