Homerisers Inc. is in the business of building houses. Each house is classified as a job, Job H – 5863 Waterpass Drive Direct Materials $25,480 Direct Labor $32,800 Direct Labor Hours 925 Homerisers Inc (Company Wide) Total Direct Materials $326,144 Total Direct Labor $213,200 Estimated Overhead $375,000 Actual Overhead $397,420 Estimated Total Direct Labor Hours 14,250 Actual Total Direct Labor Hours 15,280 Using the 7-Steps for Assigning Costs, compute total manufacturing costs for Job Z. The company uses normal costing. Clearly label and explain each step.
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.
Homerisers Inc. is in the business of building houses. Each house is classified as a job,
| Job H – 5863 Waterpass Drive | ||
| Direct Materials | $25,480 | |
| Direct Labor | $32,800 | |
| Direct Labor Hours | 925 |
| Homerisers Inc (Company Wide) | ||
| Total Direct Materials | $326,144 | |
| Total Direct Labor | $213,200 | |
| Estimated Overhead | $375,000 | |
| Actual Overhead | $397,420 | |
| Estimated Total Direct Labor Hours | 14,250 | |
| Actual Total Direct Labor Hours | 15,280 |
Using the 7-Steps for Assigning Costs, compute total
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