In a Chart, calculate the revised overhead allocation based on equipment hours the resulting job profitability (Compare to the insurance company benchmarks). Which jobs should they focus on? Fire Restoration Flood Restoration Other Total Comm. Res. Comm. Res. Comm. Res. Comm. Res. Revenue $224640 $44096 $237005 $46515 $4650 $9047 $507295 $99658 Overhead cost allocated $45000 $9000 $33000 $6600 $4000 $800 $82000 $16400 Direct labour cost $80000 $16000 $76000 $15200 $8000 $1600 $164000 $32800 Number of labour hours 2250 450 1650 330 200 40 4100 820 Direct material $100000 $20000 $97500 $19500 $27500 $5500 $225000 $45000 Equipment hours used 350 70 600 120 75 15 1025 205 Total cost $225000 $45000 $206500 $41300 $39500 $7900 $471000 $94200 BIG benchmark total cost $220000 $44000 $210000 $42000 $42500 $8500
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.
3. In a Chart, calculate the revised
Fire Restoration Flood Restoration Other Total
Comm. Res. Comm. Res. Comm. Res. Comm. Res.
Revenue $224640 $44096 $237005 $46515 $4650 $9047 $507295 $99658
Overhead cost allocated $45000 $9000 $33000 $6600 $4000 $800 $82000 $16400
Direct labour cost $80000 $16000 $76000 $15200 $8000 $1600 $164000 $32800
Number of labour hours 2250 450 1650 330 200 40 4100 820
Direct material $100000 $20000 $97500 $19500 $27500 $5500 $225000 $45000
Equipment hours used 350 70 600 120 75 15 1025 205
Total cost $225000 $45000 $206500 $41300 $39500 $7900 $471000 $94200
BIG benchmark total cost $220000 $44000 $210000 $42000 $42500 $8500
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