Freeman Furnishings has summarized its data as shown: Depreciation of factory building $109,500 Factory real estate taxes $15,000 Factory utility expenses $85,000 Indirect materials $32,000 Indirect labor $25,000 Direct labor cost $83,000 Direct labor hours incurred 25,500 Estimated direct labor hours 26,000 Raw material purchased $350,000 Raw material, beginning inventory $30,000 Raw material, ending inventory $30,000 Work in process, beginning inventory $52,000 Work in process, ending inventory $69,000 Estimated overhead $279,500 Compute the cost of goods manufactured, assuming that the overhead is allocated based on direct labor hours. $fill in the blank 1
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.
Freeman Furnishings has summarized its data as shown:
| $109,500 | |
| Factory real estate taxes | $15,000 |
| Factory utility expenses | $85,000 |
| Indirect materials | $32,000 |
| Indirect labor | $25,000 |
| Direct labor cost | $83,000 |
| Direct labor hours incurred | 25,500 |
| Estimated direct labor hours | 26,000 |
| Raw material purchased | $350,000 |
| Raw material, beginning inventory | $30,000 |
| Raw material, ending inventory | $30,000 |
| Work in process, beginning inventory | $52,000 |
| Work in process, ending inventory | $69,000 |
| Estimated overhead | $279,500 |
Compute the cost of goods manufactured, assuming that the overhead is allocated based on direct labor hours.
$fill in the blank 1
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