Calico Company costs its proc using a normal costing system Overhead is applied on the b machine hours. The following
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.
3
![Calico Company costs its products
using a normal costing system.
Overhead is applied on the basis of
machine hours. The following
information is available for last year:
Budget Actual
Overhead.
$525,000
Machine hours...........
50,000
48,000
Direct labor hours...............
75,000
72,000
Prime cost (Direct Material and Direct
Labour) $561,750
Units produced..........
175,000
What is the overhead rate per machine
hour?
Question 4Answer
a.
$497,500
$10.55
b.
$11.50
C.
$10.50
d.
$9.75
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