Kayley Company manufactures jewelry boxes. The primary materials (wood, brass, and glass) and direct labor are assigned directly to the products. Manufacturing overhead costs are allocated based on machine hours. Data for the year follow: Machine hours Maintenance labor (repairs to equipment) Plant supervisor's salary Screws, nails, and glue Plant utilities Freight out Depreciation on plant and equipment Advertising expense Estimated 25,000 hours $12,000 47,000 24,000 41,000 37,000 87,000 43,000 Actual 32,100 hours 28,5000 48,000 45,000 96,850 46,500 83,000 54,000 Requirements 1. Compute the predetermined overhead allocation rate. Round to two decimal places.
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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