3. Joven Manufacturing, Inc. uses a job order costing system. The company uses predetermined overhead rates in applying manufacturing overhead to individual jobs. The predetermined overhead rate in Department A is based on direct labor hours, the rate in Department B is based on machine hours, and the rate in Department C is based on direct labor cost. At the beginning of the most recent year, members of Joven's management team made the following estimates for the year: Department . A B C Direct labor hours 80,000 26,000 60,000 Machine hours 50,000 85,000 23,000 Direct labor cost P400,000 P150,000 P800,000 Direct materials P200,000 P 26,000 P 42,000 Manufacturing overhead P560,000 P340,000 P240,000 Required: C. On December 31, Stoll showed the following actual costs and operating data for all jobs worked on during the year: Department A B C Direct labor hours 76,000 28,920 63,000 Machine hours 54,000 87,200 21,000 Direct labor cost P395,200 P138,000 P815,000 Direct materials P215,900 P 24,380 P 39,080 Manufacturing overhead P540,000 P345,000 P254,000 Compute the amount of under- or overapplied overhead in each department at the end of the year and indicate whether it is under- or overapplied.
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.
3. Joven Manufacturing, Inc. uses a
predetermined
predetermined overhead rate in Department A is based on direct labor hours, the rate in
Department B is based on machine hours, and the rate in Department C is based on direct
labor cost. At the beginning of the most recent year, members of Joven's management team
made the following estimates for the year:
Department .
A B C
Direct labor hours 80,000 26,000 60,000
Machine hours 50,000 85,000 23,000
Direct labor cost P400,000 P150,000 P800,000
Direct materials P200,000 P 26,000 P 42,000
Manufacturing overhead P560,000 P340,000 P240,000
Required:
C. On December 31, Stoll showed the following actual costs and operating data for all jobs
worked on during the year:
Department
A B C
Direct labor hours 76,000 28,920 63,000
Machine hours 54,000 87,200 21,000
Direct labor cost P395,200 P138,000 P815,000
Direct materials P215,900 P 24,380 P 39,080
Manufacturing overhead P540,000 P345,000 P254,000
Compute the amount of under- or overapplied overhead in each department at the end of the
year and indicate whether it is under- or overapplied.
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