F Limited manufactures stereo speakers in two factories; one called Geelong and the other called Preston. The Geelong factory uses direct labor cost (DL$) for its overhead rate and the Preston factory uses machine-hours (MHs) for its overhead rate. Information related to both plants for last year is presented below. Required: Enter the missing numbers only (rounded to the nearest whole number), and indicate whether applied overhead is under or over, and whether the disposition of the balance of manufacturing overhead is a debit or credit to COGS. Geelong factory Preston factory Estimated total manufacturing overhead cost $1,005,000 $2,035,000 Estimated total amount of allocation base 185,000 MHs Predetermined overhead rate 15 per DL$ Actual amount of allocation base 195,000 MHs Actual manufacturing overhead $1,015,500 $2,150,000 Applied manufacturing overhead $1,020,000 Manufacturing overhead account balance Under or Over applied overhead Debit or Credit Cost of Good Sold to dispose of manufacturing overhead account balance
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
IF Limited manufactures stereo speakers in two factories; one called Geelong and the other called Preston. The Geelong factory uses direct labor cost (DL$) for its
Required:
Enter the missing numbers only (rounded to the nearest whole number), and indicate whether applied overhead is under or over, and whether the disposition of the balance of manufacturing overhead is a debit or credit to COGS.
|
Geelong factory |
Preston factory |
|
|
Estimated total |
$1,005,000 |
$2,035,000 |
|
Estimated total amount of allocation base |
|
185,000 MHs |
|
Predetermined overhead rate |
15 per DL$ |
|
|
Actual amount of allocation base |
|
195,000 MHs |
|
Actual manufacturing overhead |
$1,015,500 |
$2,150,000 |
|
Applied manufacturing overhead |
$1,020,000 |
|
|
Manufacturing overhead account balance |
|
|
|
Under or Over applied overhead |
|
|
|
Debit or Credit Cost of Good Sold to dispose of manufacturing overhead account balance |
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