Applied fixed manufacturing overhead to work in process inventory using the fixed portion of the predetermined overhead rate multiplied by the number of direct labor hours allowed so manufacture 125,000 units. Actual fixed manufacturing overhead costs for the year were $2,450,000. Of this total $1,300,000 related to items such as insurance, utilities and salaried indirect laborers that were all paid in cash and $1,150,000 related to depreciation of equipment. Required: Prepare a journal entry Fixed MFG Overhead Standard Hours: 2 hours Standard Price: $2 Standard Cost $4 Calculate the fixed overhead variances
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.
Transaction:
Applied fixed manufacturing
Required: Prepare a
Fixed MFG Overhead Standard Hours: 2 hours Standard Price: $2
Calculate the fixed overhead variances
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