At the beginning of the year, Han Company estimated the following: Overhead $582,400 Direct labor hours 80,000 Han uses normal costing and applies overhead on the basis of direct labor hours. For the month of January, direct labor hours were 6,950. By the end of the year, Han showed the following actual amounts: Overhead $613,320 Direct labor hours 84,100 Assume that unadjusted Cost of Goods Sold for Han was $927,000.
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.
![Calculating the Predetermined Overhead Rate,
Applying Overhead to Production, Reconciling
Overhead at the End of the Year, Adjusting Cost
of Goods Sold for Under- and Overapplied
Overhead
At the beginning of the year, Han Company
estimated the following:
Overhead
$582,400
Direct labor hours
80,000
Han uses normal costing and applies overhead
on the basis of direct labor hours. For the
month of January, direct labor hours were
6,950. By the end of the year, Han showed the
following actual amounts:
Overhead
$613,320
Direct labor hours
84,100
Assume that unadjusted Cost of Goods Sold for
Han was $927,000.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc15f98d2-6441-4793-a984-5560f49db460%2F34d4e9d4-ceb7-406f-abb9-836df361730a%2Fk12kwy8_processed.jpeg&w=3840&q=75)
![Required:
1. Calculate the predetermined overhead
rate for Han.
2. Calculate the overhead applied to
production in January. (Note: Round to
the nearest dollar.)
3. Calculate the total applied overhead for
the year. Was overhead over- or
underapplied? By how much?
4. Calculate adjusted Cost of Goods Sold
after adjusting for the overhead variance.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc15f98d2-6441-4793-a984-5560f49db460%2F34d4e9d4-ceb7-406f-abb9-836df361730a%2F7ngpyr_processed.jpeg&w=3840&q=75)
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