Assume that the following predictions were made for the year for one of the plants of Milliken & Company: Total manufacturing overhead for the year $ 20,000,000 Total machine hours for the year 1,600,000 Actual results for February the year were as follows: Manufacturing overhead $ 2,205,000 Machine hours 205,000 (a) Determine the predetermined overhead rate per machine hour. (Enter answer using two decimal places.) (b) Using the predetermined overhead rate per machine hour, determine the manufacturing overhead applied to Work-in-Process during February. (c) As of February 1, actual overhead was underapplied by $400,000. Determine the cumulative amount of any overapplied or underapplied overhead at the end of February.
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.
Assume that the following predictions were made for the year for one of the plants of Milliken & Company:
Total manufacturing
Total machine hours for the year 1,600,000
Actual results for February the year were as follows:
Manufacturing overhead $ 2,205,000
Machine hours 205,000
(a) Determine the predetermined overhead rate per machine hour. (Enter answer using two decimal places.)
(b) Using the predetermined overhead rate per machine hour, determine the manufacturing overhead applied to Work-in-Process during February.
(c) As of February 1, actual overhead was underapplied by $400,000. Determine the cumulative amount of any overapplied or underapplied overhead at the end of February.
Step by step
Solved in 3 steps
