A company has a normal production level of 200,000 units per year, and production that is more than 5% from this level is considered abnormal. Fixed overhead costs are $800,000 Requirement For the following production levels, determine the amount of fixed overhead that should be capitalized in inventories and the amount that should be directly expensed. ("Directly expensed does not include a recognized when the units are sold) (Enter a "0" for amounts with a zero balance) Amount Amount capitalized into Production directly level inventories expensed 220,000 units 210,000 units 200.000 units 195,000 units 100,000 units 50,000 units
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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