Collins Corporation uses a predetermined overhead rate based on direct labor cost to apply manufacturing overhead to jobs. The following information applies to the Collins Corporation for the current year: Direct Labor Hours Estimated for the Year 24,000 Actual Hours Worked 19,500 Direct Labor Cost Estimated for the Year 300,000 Actual Cost Incurred 210,000 Manufacturing Overhead Estimated for the Year 240,000 Actual Cost Incurred 185,000 The manufacturing overhead cost for the current year will be:
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.
- Collins Corporation uses a predetermined
overhead rate based on direct labor cost to apply manufacturing overhead to jobs. The following information applies to the Collins Corporation for the current year:
|
Direct Labor Hours |
|
|
Estimated for the Year |
24,000 |
|
Actual Hours Worked |
19,500 |
|
Direct Labor Cost |
|
|
Estimated for the Year |
300,000 |
|
Actual Cost Incurred |
210,000 |
|
Manufacturing Overhead |
|
|
Estimated for the Year |
240,000 |
|
Actual Cost Incurred |
185,000 |
- The
manufacturing overhead cost for the current year will be:
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