ing the overhead rates calculated in Requirement 1, calculate the cost of Job 316. If required, round your answer to the nearest cent. 208.5 x hat if Job 316 had required two machine hour in Fabricating and five direct labor hours in Assembly? Direct labor and direct materials costs remained the same. Calculate of Job 316. If required, round your answer to the nearest cent.
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.
Solution:-
|
Particulars |
Support Departments |
Producing Departments |
||
|
|
Human Resources |
General Factory |
Fabricating |
Assembly |
|
Direct costs |
$160,000 |
$340,000 |
$114,600 |
$96,000 |
|
Allocation: |
|
|
|
|
|
Human Resources |
($160,000) |
- |
$56,000 |
$104,000 |
|
General Factory |
- |
($340,000) |
$85,000 |
$255,000 |
|
Total after allocation |
$0 |
$0 |
$255,600 |
$455,000 |
Allocation of Human Resources Departments
Total number of employees of Producing departments=87.5+162.5= 250
Fabricating= $160000*87.5/250= $56,000
Assembly= $160000*167.5/250= $104,000
Allocation of General Factory Departments
Total square footage of Producing departments= 4,000+12,000=16,000
Fabricating= $340,000*4,000/16,000= $85,000
Assembly= $340,000*12,000/16,000= $255,000
1) Fabricating department= Total cost allocated/Total machine hours
= $255,600/80,000= $3.20 per Machine hours
Assembly department= Total cost allocated/Total labor hours
= $455,000/160,000= $2.84 per Direct labor hours
2) Overhead= (6 machine hours * $3.20+5 Direct labor hours * $2.84) = $33.40
Cost of Job 316= Direct materials +Direct labor +Overhead
= $140+$50+$33.40=$223.4
3) Overhead= (2 machine hours * $3.20+5 Direct labor hours *$2.84) = $20.60
Ne cost of Job 316=Direct materials +Direct labor +Overhead
= $140+50+20.60=$210.60
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