II. The Auto Care Body Shop uses a job order cost system to determine the cost of performing automotive body and repair work. Estimated costs and expenses for the coming period are as follows: Auto parts $ 520,000 15,200 384,000 Advertising expense Shop direct labor Shop and repair equipment depreciation Administrative office salaries Shop supervisor salaries Shop property tax Administrative office depreciation Shop supplies Total costs and expenses 14,800 54,800 82,400 23,200 10,000 12,400 $1,116,800 The average shop direct labor rate is $12 per hour. Required: Determine the predetermined shop overhead rate per direct labor hour
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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