JOB ORDER COSTING Dish, Inc. manufactures recreational vehicles. Dish uses a job order cost system. The time tickets from April jobs are summarized (in $) as follows: Job 201 - 5,250.00 Job 202 - 6,100.00 Job 203 - 4,280.00 Job 204 - 5,620.00 Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $25 per direct labor hour. The direct labor rate is $50 per hour. Compute the factory overhead for April. COMPUTATION OF FACTORY OVERHEAD: (Shown below) Job No. Factory Overhead
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.
JOB ORDER COSTING
Dish, Inc. manufactures recreational vehicles. Dish uses a
- Job 201 - 5,250.00
- Job 202 - 6,100.00
- Job 203 - 4,280.00
- Job 204 - 5,620.00
Factory
Compute the factory overhead for April.
COMPUTATION OF FACTORY OVERHEAD: (Shown below)
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Factory Overhead |
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Discuss briefly why factory overhead is computed based on direct labor. Show discussion below.
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