unrise Company provides building services. Each building job is different from the others and the company's accountant uses a job-order costing system to allocate costs to the different jobs. She uses direct labour hours as the basis for overhead allocation and estimates the following amounts for the year: Direct materials $ 14,940,000 Direct labour costs $ 8,500,000 Overhead $ 5,100,000 Direct labour hours 425,000 The accountant recorded the following data for the three jobs that Sunrise started and completed during the quarter. School Residential Cinema Direct materials $ 2,988,000 $ 2,241,000 $ 4,482,000 Direct labour hours 63,600 31,800 15,900 Required: 1. Compute the predetermined overhead allocation rate for the year and apply overhead to the three jobs. (Round your "Predetermined overhead allocation rate" to 2 decimal places). Predetermined Overhead Allocation Rate __________ per DLH Overhead Applied School Residential Cinema 2. Compute the cost of each job. (Do not round intermediate calculations). School Residential Cinema Direct Materials Direct Labour Overhead Total Job Cos
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.
Sunrise Company provides building services. Each building job is different from the others and the company's accountant uses a job-order costing system to allocate costs to the different jobs. She uses direct labour hours as the basis for
| Direct materials | $ | 14,940,000 | |
| Direct labour costs | $ | 8,500,000 | |
| Overhead | $ | 5,100,000 | |
| Direct labour hours | 425,000 | ||
The accountant recorded the following data for the three jobs that Sunrise started and completed during the quarter.
| School | Residential | Cinema | |||||||
| Direct materials | $ | 2,988,000 | $ | 2,241,000 | $ | 4,482,000 | |||
| Direct labour hours | 63,600 | 31,800 | 15,900 | ||||||
Required:
1. Compute the predetermined overhead allocation rate for the year and apply overhead to the three jobs. (Round your "Predetermined overhead allocation rate" to 2 decimal places).
| Overhead Applied | |
| School | |
| Residential | |
| Cinema |
2. Compute the cost of each job. (Do not round intermediate calculations).
| School | Residential | Cinema | |
| Direct Materials | |||
| Direct Labour | |||
| Overhead | |||
| Total |
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