in the production process. The company applies ove to products using machir predetermined OH rate for 2010: Expected overhead other than rework S850,000 Expected rework costs 75,000 $925,000 100,000 Total expected overhead Expected machine hours for 2010 During 2010, the following production and cost data were accumulated: Total good production completed Total defects 2,000,000 feet of pipe 40,000 feet of pipe Ending inventory 75,000 feet of pipe Total cost of direct material for Job #8316 $687,100 Total cost of direct labor for Job #8316 $157,750 Total machine hours for Job #8316 3,080 Cost of reworking defects during 2010 S75 500
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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