During May Company had following expenditures: indirect material used: $25,000 indirect labor: $12,000 factory utilities: $5,000 delivery vehicle insurance: $1,200 factory rent: $3,000 store rent: $18,000 Company allocate overhead based on labor hours. Predetermined MOH rate calculated as $24.50 per hour. Actual labor hours happened during May is 2,000 hours. Calculate actual and allocated overhead and adjust overhead at the end of May. Company has following balances as of May 31; WIP Inventory: $25,000 Finished Goods: $15,000 COGS: $120,000
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.
During May Company had following expenditures:
indirect material used: $25,000
indirect labor: $12,000
factory utilities: $5,000
delivery vehicle insurance: $1,200
factory rent: $3,000
store rent: $18,000
Company allocate
WIP Inventory: $25,000
Finished Goods: $15,000
COGS: $120,000
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