The Aleutian Company produces two products, Rings and Dings. They are manufactured in two departments—Fabrication and Assembly. Data for the products and departments are listed below. Product Number ofUnits Labor HoursPer Unit Machine HoursPer Unit Rings 1,200 2 5 Dings 1,840 4 9 All of the machine hours take place in the Fabrication Department, which has an estimated overhead of $85,200. All of the labor hours take place in the Assembly Department, which has an estimated total overhead of $69,400. The Aleutian Company uses a departmental overhead rates. The Fabrication Department uses machine hours for an allocation base, and the Assembly Department uses labor hours. What is the overhead cost per unit for Dings? a.$50.86 b.$33.12 c.$62.46 d.$8.48 Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. The following table presents information about estimated overhead and direct labor hours. Overhead DirectLabor Hours (dlh) Product A B Painting Dept. $548,520 14,000 dlh 14 dlh 5 dlh Finishing Dept. 56,120 6,100 4 16 Totals $604,640 20,100 dlh 18 dlh 21 dlh Determine the overhead from both production departments allocated to each unit of Product A if Blue Ridge Marketing Inc. uses a multiple department rate system. a.$39.18 per unit b.$343.10 per unit c.$585.32 per unit d.$9.20 per unit The journal entry to record the transfer of 1,140 units of part number 1177 with a value of $1.20 each, to work in process is a. Materials$1,368 Work in Process$1,368 b. Work in Process$1,368 Cash$1,368 c. Work in Process$1,368 Materials$1,368 d. Work in Process$1,368 Factory Overhead$1,368
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.
The Aleutian Company produces two products, Rings and Dings. They are manufactured in two departments—Fabrication and Assembly. Data for the products and departments are listed below.
Product |
Number of Units |
Labor Hours Per Unit |
Machine Hours Per Unit |
| Rings | 1,200 | 2 | 5 |
| Dings | 1,840 | 4 | 9 |
All of the machine hours take place in the Fabrication Department, which has an estimated overhead of $85,200. All of the labor hours take place in the Assembly Department, which has an estimated total overhead of $69,400.
The Aleutian Company uses a departmental overhead rates. The Fabrication Department uses machine hours for an allocation base, and the Assembly Department uses labor hours.
What is the overhead cost per unit for Dings?
Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. The following table presents information about estimated overhead and direct labor hours.
Overhead |
Direct Labor Hours (dlh) |
Product | |||||||
| A | B | ||||||||
| Painting Dept. | $548,520 | 14,000 | dlh | 14 | dlh | 5 | dlh | ||
| Finishing Dept. | 56,120 | 6,100 | 4 | 16 | |||||
| Totals | $604,640 | 20,100 | dlh | 18 | dlh | 21 | dlh |
Determine the overhead from both production departments allocated to each unit of Product A if Blue Ridge Marketing Inc. uses a multiple department rate system.
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