Tiger Furnishings produces two models of cabinets for home theater components, the Basic and the Dominator. Data on operations and costs for March follow: Basic Dominator Total Units Produced 1,000 250 1,250 Machine hours 4,000 2,000 6,000 Direct labor hours 3,000 2,000 5,000 Direct Materials costs P10,000 P3,750 P13,750 Direct labor costs 64,500 35,500 100,000 Manufacturing Overhead costs P174,100 Compute for the predetermined overhead rate using the following base:
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.
- Tiger Furnishings produces two models of cabinets for home theater components, the Basic and the Dominator. Data on operations and costs for March follow:
Basic Dominator Total
Units Produced 1,000 250 1,250
Machine hours 4,000 2,000 6,000
Direct labor hours 3,000 2,000 5,000
Direct Materials costs P10,000 P3,750 P13,750
Direct labor costs 64,500 35,500 100,000
Compute for the predetermined overhead rate using the following base:
___12. Direct labor hours
__13. Direct labor costs
___14. Machine hours 174,100/6000
__15. Physical output
___16. Direct material cost
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