Little Lizards Everywhere Co. ("LLE") uses job-order costing and allocates MOH using normal costing. LLE uses two MOH (Manufacturing Overhead) accounts: MOH Control for accumulating MOH costs and MOH Allocated for recording MOH allocated to Jobs. For 2019, LLE decided to use machine hours as its base for allocating MOH and estimated that it would use 50,000 machine hours that year. Before the year began, LLE set a MOH rate of $24 per machine hour. During 2019 LLE actually used 51,000 machine hours and actually spent $1,100,000 on MOH costs. What total amount of MOH did LLE allocate to its products during 2019?
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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