Fairfield Company applies manufacturing overhead to products at a predetermined rate of $66 per direct labor hour. Its actual manufacturing costs for the most recent period are summarized here: Total Item Description Cost Direct materials Indirect materials $ 85,000 14,000 Used on Jobs 101 and 102 Used on multiple jobs 930 hours @ $33 per hour 220 hours for Job 101 = Hourly labor wages $ 7, 260 340 hours for Job 102 = 11,220 з0,690 4,150 5,600 1,600 8,600 370 hours for Job 103 = 12,210 Factory supervision Production engineer Factory janitorial work Selling, general, and administrative salaries Other manufacturing overhead costs (factory rent, insurance, depreciation, etc.) Other selling, general, and administrative costs (office rent, insurance, depreciation, etc.) 6,000 4,700 1. Prepare the journal entry to close the Manufacturing Overhead account balance to Cost of Goods Sold. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
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.
Manufacturing overhead: It is the indirect cost incurred as a part of manufacturing the products. These costs are not directly related to the units manufactured. So they are allocated to the manufactured units based on estimated cost drivers.
Under/over applied overhead: If the overhead applied is more than the actual overhead, then the overhead is said to be over applied. If the overhead applied is less than the actual overhead then the overhead is said to be under applied.
Work-in process: This is the cost of units which were semi-finished in a particular period. Further work should be done and cost should be incurred to make them into finished products.
Finished goods: These are the units which were completed by the manufacturing process and were ready to sale.
Cost of goods sold: It is the total cost of units which were sold. This cost includes all the manufacturing costs of units.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
