Davidson Inc. uses a standard costing system. The following monthly cost functions apply to its manufacturing overhead items: Overhead Item Cost Function $2.30 per DLH Indirect materials Indirect labor $3.90 per DLH Utilities $1.90 per DLH $72,000 Insurance Depreciation $288,000 Information for the month of December is as follows: Actual overhead costs incurred: Indirect materials Indirect labor Utilities Insurance Depreciation Total Actual direct labor hours worked Standard direct labor hours allowed for production achieved $187,2 00 216,00 0 86,400 79,200 288,00 $856,8 00 72,000 81,000 Carlson uses expected capacity to calculate standard overhead rates. The monthly expected capacity is 75,000 hours. What is the variable overhead rate. ENTER YOUR ANSWER TO 2 DECIMAL PLACES. DO NOT ENTER THE $ SIGN
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.
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