Luthan Company uses a predetermined overhead rate of $23.40 per direct labor-hour. This predeterminedrate was based on 11,000 estimated direct labor-hours and $257,400 of estimated total manufacturingoverhead.The company incurred actual total manufacturing overhead costs of $249,000 and 10,800 total directlabor-hours during the period.Required:Determine the amount of manufacturing overhead that would have been applied to units of product duringthe period.
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.
Luthan Company uses a predetermined
rate was based on 11,000 estimated direct labor-hours and $257,400 of estimated total manufacturing
overhead.
The company incurred actual total manufacturing overhead costs of $249,000 and 10,800 total direct
labor-hours during the period.
Required:
Determine the amount of manufacturing overhead that would have been applied to units of product during
the period.
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