One Company uses a normal, traditional (functional) cost system and applies overhead to production based on machine hours. The accounting system provided the following information. Estimated overhead cost $150,000 Actual overhead cost $140,000 Estimated machine hours 20,000 hours Actual machine hours 25,000 hours Calculate the amount of applied overhead assigned to production for the period. $150,000 $112,000 $140,000 $187,500
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.
One Company uses a normal, traditional (functional) cost system and applies
Estimated overhead cost $150,000
Actual overhead cost $140,000
Estimated machine hours 20,000 hours
Actual machine hours 25,000 hours
Calculate the amount of applied overhead assigned to production for the period.
$150,000
$112,000
$140,000
$187,500
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