Adirondak Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. Overhead TotalDirectLabor Hours DLH per Product A B Painting Dept. $253,200 11,600 8 6 Finishing Dept. 83,000 11,200 4 6 Totals $336,200 22,800 12 12 Calculate the plantwide factory overhead rate for Adirondack Marketing Inc.
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.
Adirondak Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory
Overhead |
Total Direct Labor Hours |
DLH per Product | ||||
| A | B | |||||
| Painting Dept. | $253,200 | 11,600 | 8 | 6 | ||
| Finishing Dept. | 83,000 | 11,200 | 4 | 6 | ||
| Totals | $336,200 | 22,800 | 12 | 12 |
Calculate the plantwide factory overhead rate for Adirondack Marketing Inc.
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