Exercise 4-6A (Algo) Allocating overhead costs among products LO 4-3 Rooney Company makes three products in its factory: plastic cups, plastic tablecloths, and plastic bottles. The expected overhead costs for the next fiscal year include the following Factory manager's salary Factory utility cost Factory supplies Total overhead costs Rooney uses machine hours as the cost driver to allocate overhead costs. Budgeted machine hours for the products are as follows. Cups Tablecloths Bottles Total machine hours $240,300 74,000 24,000 $338,300 Product Required a. Allocate the budgeted overhead costs to the products. Cups Tablecloths Bottles Total 290 Hours 725 975 1,990 Allocation Rate x Weight of Base = Allocated Cost x $ 0 X 0 0 0 = = II $
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.
Accounting
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
