4. UFC Inc. applies factory overhead as follows: Department Per Machine Hour Fabricating P10 Spreading P20 Packaging P30 Actual machine hours are: Fabricating – 2,000 hours Spreading – 1,500 hours Packaging – 3,000 hours The following additional data are provided: a. The actual factory overhead expense for the period is P100,000 b. The ending balances of the inventories and cost of goods sold after the application of overhead are as follows: Raw materials 200,000 Work in process 100,000 Finished goods 400,000 Cost of goods sold 500,000 c. The over/(under) applied overhead during the period is considered material if at least 30% of actual factory overhead, What is the adjusted cost of goods sold after closing the under/over application of factory overhead? A. 460,000 B. 480,000 C. 540,000 D. 483,333
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.
4. UFC Inc. applies factory
Department Per Machine Hour
Fabricating P10
Spreading P20
Packaging P30
Actual machine hours are:
Fabricating – 2,000 hours
Spreading – 1,500 hours
Packaging – 3,000 hours
The following additional data are provided:
a. The actual factory overhead expense for the period is P100,000
b. The ending balances of the inventories and cost of goods sold after the application of overhead are as
follows:
Raw materials 200,000
Work in process 100,000
Finished goods 400,000
Cost of goods sold 500,000
c. The over/(under) applied overhead during the period is considered material if at least 30% of actual
factory overhead,
What is the adjusted cost of goods sold after closing the under/over application of factory overhead?
A. 460,000
B. 480,000
C. 540,000
D. 483,333
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