Labor Direct-labor hours: Job 57 Job 58 Job 59 Labor costs: Direct-labor wages Indirect-labor wages Supervisory salaries Material Inventories, November 1: Raw material and supplies Chapter 3 Work in process (Job 57) Finished goods Purchases of raw material and supplies Raw material Supplies (Indirect material) Direct material and supplies requisitioned for production Job 57 Job 58 Job 50 Supplies (indirect material) Total Other Building occupancy costs (heat, light, depreciation, etc.) Factory facilities Sales offices. Administrative offices Total Production equipment costs: Power Repairs and maintenance. Depreciation. Other Total Product Costing and Cost Accumulation in a batch Produc Direct-Labor Hours 100,000 115.000 130,000 During November the following jobs were completed: Job 57 Jab 58 www. PROD a Variable $300,000 345,000 390,000 7,000 6,000 4,000 $408,000 30,000 12,000 $ 21,000 108,000 125,000 The firm's job-order costing system uses direct-labor hours (measured at practical capacity) as the cost driver for overhead application. In December of the preceding year, Shar had prepared the following budget for direct-labor and manufacturing-overhead costs for the current year. The plant is theoretically capable of operating at 140,000 direct-labor hours per year. However, Shar estimates that the practical capacity is 115,000 hours in a typical year. Required Assist Shar by making the following calculations. 1. Calculate the predetermined overhead rate for the current year. 2. Calculate the total cost of Job 57, 3. Compute the amount of manufacturing overhead applied to Job 59 during November. $270,000 30,000 $ 90,000 75,000 51,000 24,000 $240,000 $ 12.800 3.200 2,000 $ 18,000 $ 8,200 3,000 3,000 2,000 $ 16.200 Manufacturing Overhead Fixed $230,000 230,000 230,000 10 az. water glasses 5 oz. juice glasses
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.
![Labor
Direct-labor hours:
Job 57
Job 58
Job 59
Labor costs:
Direct-labor wages
Indrect-labor wages
Supervisory salaries
Material
Inventories, November 1.
Raw material and supplies
Work in process (Job 57)
Finished goods
Purchases of raw material and supplies
Raw material
Chapter 3 Product Costing and Cost Accumulation in a batoh Produc...
Supplies (Indirect material)
Direct material and supplies requisitioned for production
Job 57
Job 58
Job 59
Supplies (indirect material)
Total
Other
Building occupancy costs (heat, light, depreciation, etc.)
Factory facilities
Sales offices.
Administrative offices
Total
Production equipment costs:
Power Com
Repairs and maintenance
Depreciation
Other
Total
Direct-Labor Hours
100.000
115.000
130,000
111
During November the following jobs were completed:
Job 57
Job 58
Variable
$300,000
345,000
390,000
7,000
6,000
4,000
$408.000
30,000
12.000
$ 21,000
108,000
125,000
Required
Assist Shar by making the following calculations.
1. Calculate the predetermined overhead rate for the current year.
2. Calculate the total cost of Job 57,
3. Compute the amount of manufacturing overhead applied to Job 59 during November.
$270,000
30,000
The firm's job-order costing system uses direct-labor hours (measured at practical capacity) as the cost-
driver for overhead application. In December of the preceding year, Shar had prepared the following
budget for direct-labor and manufacturing-overhead costs for the current year. The plant is theoretically
capable of operating at 140,000 direct-labor hours per year. However, Shar estimates that the practical
capacity is 115,000 hours in a typical year.
$ 90,000
75,000
51,000
24,000
$240,000
$ 12.800
3,200
2,000
$ 18,000
Manufacturing Overhead
Fixed
$230,000
230,000
230,000
10 az, water glasses
5 oz. juice glasses
$ 8,200
3,000
3,000
2,000
$ 16,200
4. What was the total amount of manufacturing overhead applied during November?
5. Compute the actual manufacturing overhead incurred during November.
6. Calculate the overapplied or underapplied overhead for November.
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