Etona company has two service departments and three producing departments. made available: The following đátă was Service Departments Maintenance Engineering Producing Departments A Maintenance Hrs Engineering Hrs Overhead Costs 400 800 200 200 400 400 800 P80,000 400 P12,000 P54,000 P90,000 P50,000 INDEPENDENT QUESTIONS: 1. Assume that department C applies factory overhead based on units produced with an estimate of 5,000 units for the period. The actual units produced for the current period was 4800. If the company uses the step method in allocating service department costs, how much is the applied factory overhead of department C. 2. Compute for the overhead rate for department A if the company uses the direct method in allocating service department costs and the department applies overhead based on 18,000 direct labor hours. 3. Under the reciprocal method, what would be the total Engineering department cost?
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.
![Etona company has two service departments and three producing departments. The following data was
made available:
Service Departments
Maintenance Engineering
Producing Departments
A
B
Maintenance Hrs
400
800
200
200
Engineering Hrs
Overhead Costs
400
800
400
400
P12,000
P54,000
P80,000
P90,000
P50,000
INDEPENDENT QUESTIONS:
1. Assume that department C applies factory overhead based on units produced with
an estimate of 5,000 units for the period. The actual units produced for the current period
was 4800. If the company uses the step method in allocating service department costs,
how much is the applied factory overhead of department C.
2. Compute for the overhead rate for department A if the company uses the direct
method in allocating service department costs and the department applies overhead
based on 18,000 direct labor hours.
3. Under the reciprocal method, what would be the total Engineering department cost?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1e5df8b0-53fe-4434-819f-bf2e06bf671a%2F8eae27b2-2aea-49f6-92b0-9061dbca0120%2Fyhy6tpl_processed.png&w=3840&q=75)
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