9 Patterson, Inc. uses job-order costing with manufacturing overhead (MOH) applied on the basis of machine hours (MHS). In the past, the company's pre-determined overhead rate (POHR) has fluctuated from period to period due primarily to differences in expected usage of their machine. For the coming month, the controller would like to investigate using capacity in determining the application of overhead to jobs. For the period, the machine can operate at a capacity of 320 MHs, however, based on expected production, it is estimated that only 290 MHs will be required. MOH is relatively fixed for the company and is estimated to be $11,600 at both of these levels of MHs. At the end of the period, the controller found that production used 292 MHs and actual MOH totaled $11,745. How much less MOH would be applied during the month using capacity MHs rather than the traditional method? A. S 1.241.00 less applied to MOH using capacity. B. S 1,087.50 less applied to MOH using capacity. 4 C. S 1,095.00 less applied to MOH using capacity. D. S 1,167.50 less applied to MOH using capacity. E. None of the above
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.
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