HH Auto Repair reports the following information for the coming year. $ Labor rate, including fringe benefits Annual labor hours Annual materials (parts) purchases $2,190,000 Annual overhead costs: Materials purchasing, handling, and storage $ 394,200 Other overhead (depreciation, insurance, taxes, rent) Target profit margin (on both labor and materials) $ 178,500 32 % 1. Compute the price (rate) per hour of direct labor. (Round your answer to 2 decimal places.) 2. Compute the materials markup (in %). 3. What price should the company quote for a job requiring four labor hours and $770 in parts? (Round your answe places.) 1. Total labor rate per hour 2. Materials markup % 3. Total price quote 55 per labor hour 11,900 hours
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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