Luxury Goods Pty Ltd allocates manufacturing overhead to work in process on the basis of machine hours. On 1 January of the current year, there were no balances in work in process or finished goods inventories. The following estimates were included in the budget for the current year:Total estimated manufacturing overhead$300 000Total estimated machine hours40 000During January, the firm worked on the following production jobs:B81:1 600 machine hoursJ76:2 400 machine hoursM49:1 000 machine hoursDuring January, job numbers B81 and J76 were completed, and job number B81 was sold. The actual manufacturing overhead incurred during January was $30 000.Required:a) Calculate the company’s predetermined overhead rate for the year.b) How much manufacturing overhead was applied to production during January?c) Calculate the overapplied or underapplied overhead for January.SHOW YOUR WORKINGQuestion 3-Week 4(9b) (7 marks)Kool Inc. uses a weighted-average process costing system and has one production department. All materials are introduced at the start of manufacturing; in contrast, conversion cost is incurred uniformly throughout production. The company had respective work in process inventories on 1 May and 31 May of 62,000 units and 70,000 units, the latter of which was 40 per cent complete. The production supervisor noted that Koolcompleted 100,000 units during the month.Costs in the 1 May work in process inventory were subdivided as follows: materials, $40,000; conversion, $90,000. During May, Kool charged production with $300,000 of material and $710,000 of conversion, resulting in a material cost per equivalent unit of $2.Required:a)Determine the number of units that Koolstarted during May.b)Compute the number of equivalent units with respect to conversion cost
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.
Luxury Goods Pty Ltd allocates manufacturing
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