Percent of capacity 90% 100% 110% Direct labor hours 3,600 4,000 4,400 Units of output 720 800 880 Variable overhead $3,960 $4,400 $4,840 Fixed overhead 5,600 5,600 5,600 Total overhead $9,560 $10,000 $10,440 Normal capacity = 100% and overhead is applied based on direct labor hours Standard overhead rate = $10,000/4,000 = $2.50 per direct labor hour Direct materials are $69.50 per unit. Direct labor is $22.50 per hour. Prepare a flexible budget for overhead based on the above data. Flexible Budget 720 800 880 Direct Material $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 Direct Labor fill in the blank 4 fill in the blank 5 fill in the blank 6 Variable Overhead fill in the blank 7 fill in the blank 8 fill in the blank 9 Fixed Overhead fill in the blank 10 fill in the blank 11 fill in the blank 12 Total $fill in the blank 13 $fill in the blank 14 $fill in the blank 15
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.
| Percent of capacity | 90% | 100% | 110% |
| Direct labor hours | 3,600 | 4,000 | 4,400 |
| Units of output | 720 | 800 | 880 |
| Variable |
$3,960 | $4,400 | $4,840 |
| Fixed overhead | 5,600 | 5,600 | 5,600 |
| Total overhead | $9,560 | $10,000 | $10,440 |
Normal capacity = 100% and overhead is applied based on direct labor hours
Standard overhead rate = $10,000/4,000 = $2.50 per direct labor hour
Direct materials are $69.50 per unit.
Direct labor is $22.50 per hour.
Prepare a flexible budget for overhead based on the above data.
Flexible Budget
| 720 | 800 | 880 | |
| Direct Material | $fill in the blank 1 | $fill in the blank 2 | $fill in the blank 3 |
| Direct Labor | fill in the blank 4 | fill in the blank 5 | fill in the blank 6 |
| Variable Overhead | fill in the blank 7 | fill in the blank 8 | fill in the blank 9 |
| Fixed Overhead | fill in the blank 10 | fill in the blank 11 | fill in the blank 12 |
| Total | $fill in the blank 13 | $fill in the blank 14 | $fill in the blank 15 |
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