Coronado Church Furniture manufactures custom pews, altars, and pulpits for churches across the southern United States. Since each order is unique, Coronado uses a job order costing system. During the month of June, Coronado worked on orders for three churches: Faith Church, Grace Church, and Hope Church. Production on the Faith and Grace orders began in May, and the Faith job was completed in June. Production on the Hope order began in June and was incomplete at the end of the month. Coronado applies overhead to each job based on machine hours. Prior to the year, managers had estimated manufacturing overhead at $888,000, along with 24,000 machine hours. Additional cost information related to the three orders is as follows: Faith Grace Hope Beginning balance, June 1 $4,000 $2,600 — Direct materials, June $8,200 $6,200 $3,600 Direct labor, June $13,800 $7,500 $5,500 Manufacturing OH, June ? ? ? Machine hours, June 2,000 1,300 1,600 What is Coronado’s predetermined overhead rate? Predetermined overhead rate ? $enter the predetermined overhead rate per machine hour in dollars / machine hour How much manufacturing overhead should Coronado apply to each job for June? Manufacturing overhead Faith $enter a dollar amount Grace $enter a dollar amount Hope $enter a dollar amount What is the balance in Coronado’s Work in Process Inventory account at the end of June? Balance in work in process inventory account ? $enter the work in process inventory account balance in dollars
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.
| Faith | Grace | Hope | |||||
|---|---|---|---|---|---|---|---|
|
Beginning balance, June 1
|
$4,000 | $2,600 | — | ||||
|
Direct materials, June
|
$8,200 | $6,200 | $3,600 | ||||
|
Direct labor, June
|
$13,800 | $7,500 | $5,500 | ||||
|
Manufacturing OH, June
|
? | ? | ? | ||||
|
Machine hours, June
|
2,000 | 1,300 | 1,600 |
What is Coronado’s predetermined overhead rate?
| Predetermined overhead rate | ? | $enter the predetermined overhead rate per machine hour in dollars / machine hour |
|
Manufacturing overhead
|
|||
|---|---|---|---|
|
Faith
|
$enter a dollar amount | ||
|
Grace
|
$enter a dollar amount | ||
|
Hope
|
$enter a dollar amount |
What is the balance in Coronado’s Work in Process Inventory account at the end of June?
| Balance in work in process inventory account | ? | $enter the work in process inventory account balance in dollars |
Pre-determined overhead rate: It is the rate used for the application of manufacturing overheads. The rate is calculated at the beginning of the year by dividing the budgeted manufacturing overheads with the budgeted activity level.
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