Leo, Inc. expects to assemble 20,000 units of laptop computers this coming month.The amount ofmanufacturing overhead incurred this coming month is estimated to be $1,100,000.The number of directlabor hours is estimated to be 4,000 hours.Leo, Inc. is currently using direct labor hours as the singleallocation base to apply manufacturing overhead to the jobs.Leo, Inc. receives a job order whichrequires labor work of 200 hours.Answer the following questions. 1.Calculate the predetermined overhead rate used to apply manufacturing overhead. 2.Based on your answer in (1), calculate how much of manufactured overhead should be applied tothis specific order. 3.The amount ofactualmanufacturing overhead incurred equals $1,200,000 at the end of thismonth.The amount ofappliedmanufacturing overhead during this month is $1,050,000.Calculate the overapplied or underapplied manufacturing 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.
Leo, Inc. expects to assemble 20,000 units of laptop computers this coming month.The amount ofmanufacturing
1.Calculate the predetermined overhead rate used to apply manufacturing overhead.
2.Based on your answer in (1), calculate how much of manufactured overhead should be applied tothis specific order.
3.The amount ofactualmanufacturing overhead incurred equals $1,200,000 at the end of thismonth.The amount ofappliedmanufacturing overhead during this month is $1,050,000.Calculate the overapplied or underapplied manufacturing overhead.
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