Factory Overhead Rates, Entries, and Account Balance Sundance Solar Company operates two factories. The company appbes factory overhead to jobs on the bais of machine hours in Factory 1 and on the basis of drect labor hours in Factory 2. Estimated factory overhead costs, direct labor houts, and machine hours are as follows Factory I Factory 2 Estimated factory overhead cost for fiscal year beginining March 1 $611,100 $1,004,800 Estimated direct labor hours for year 15,700 Estimated niachine hours for year 17,460 Actual factory overhead costs for March $48,790 $86,630 Actual direct labor hours for March 1,410 Actual machine hours for March 1,360 a. Determine the factory overhead rate for Factory 1. per machine hour b. Determine the factory overhead rate for Factory 2. per direct labor hour C. Journalze the entries to apply factory overhead to production in each factory for March. Factory 1
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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