estimated the following overhead costs for the year. Indirect labor Rent on factory building Factory utilities Depreciation-Factory equipment Repairs expense-Factory equipment Indirect materials Total estimated overhead costs $ 560,500 141,300 157,300 481,308 61,300 106,100 $ 1,507,800 For the year, the company incurred $1,523,900 of actual overhead costs. It completed and sold five job with the following direct labor costs: Job 201, $605,300; Job 202, $564,300: Job 203, $299,300; Job 204, $717,300; and Job 205, $315,300. In addition, Job 205 is in process at the end of the year and had been charged $18.300 for direct labor. No jobs were in process at the beginning of the year. The company's predetermined overhead rate is based on a percent of direct labor cost. Required: 1-a. Determine the predetermined overhead rate for the year. 1-b. Determine the overhead applied to each of the six jobs during the year. 1-c. Determine the over- or underapplied overhead at the year-end. 2. Prepare the entry to close any over- or underapplied overhead to Cost of Goods Sold at year-end.
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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