Lind Company uses a normal job-order costing system. There are two departments, Assembly and Finishing, through which most jobs pass. Selected budgeted and actual data for the past year follow: Assembly Finishing Budgeted overhead $330,000 $1,000,000 Actual overhead 110,000 520,000 Expected activity (direct labor hours) 150,000 25,000 Expected machine hours 25,000 125,000 During the year, several jobs were completed. Data pertaining to one such job, Job 330, follow: Direct materials ₱730,000 Direct labor cost: Assembly (5,000 hours @ $12 per hr.) $ 60,000 Finishing (400 hours @ $12 per hr.) 4,800 Machine hours used: Assembly 100 Finishing 1,200 Units produced 10,000 Required: Compute the predetermined overhead rate. Using the predetermined rate, compute the per-unit manufacturing cost for Job 330. (Note: Round the unit cost to the nearest cent.) Recalculate the unit manufacturing cost for Job 330 using departmental overhead rates. Use direct labor hours for Assembly and machine hours for Finishing.
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.
- Lind Company uses a normal job-order costing system. There are two departments, Assembly and Finishing, through which most jobs pass. Selected budgeted and actual data for the past year follow:
|
|
Assembly |
Finishing |
|
Budgeted |
$330,000 |
$1,000,000 |
|
Actual overhead |
110,000 |
520,000 |
|
Expected activity (direct labor hours) |
150,000 |
25,000 |
|
Expected machine hours |
25,000 |
125,000 |
During the year, several jobs were completed. Data pertaining to one such job, Job 330, follow:
|
Direct materials |
₱730,000 |
|
Direct labor cost: |
|
|
Assembly (5,000 hours @ $12 per hr.) |
$ 60,000 |
|
Finishing (400 hours @ $12 per hr.) |
4,800 |
|
Machine hours used: |
|
|
Assembly |
100 |
|
Finishing |
1,200 |
|
Units produced |
10,000 |
Required:
- Compute the predetermined overhead rate.
- Using the predetermined rate, compute the per-unit
manufacturing cost for Job 330. (Note: Round the unit cost to the nearest cent.) - Recalculate the unit manufacturing cost for Job 330 using departmental overhead rates. Use direct labor hours for Assembly and machine hours for Finishing.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
