Bobby Pte Ltd charges manufacturing overhead to products by using a pre-determined overhead rate, computed on the basis of labour hours. The following data pertain to the current year: Budgeted manufacturing overhead $480,000 Actual manufacturing overhead $440,000 Budgeted labour hours 20,000 Actual labour hours 16,000 The overhead applied to production should amount to _____________. A. Over-absorbed by $56,000 B. Under-absorbed by $56,000 C. Over-absorbed by $40,000 D. Under-absorbed by $40,000 Give workings for your answer
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.
Bobby Pte Ltd charges manufacturing
Budgeted manufacturing overhead $480,000
Actual manufacturing overhead $440,000
Budgeted labour hours 20,000
Actual labour hours 16,000
The overhead applied to production should amount to _____________.
A. Over-absorbed by $56,000
B. Under-absorbed by $56,000
C. Over-absorbed by $40,000
D. Under-absorbed by $40,000
Give workings for your answer
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