Matriarch Incorporated uses a job-order costing system and a predetermined overhead rate based on machine hours. At the beginning of the year, the company estimated manufacturing overhead for the year would be $240,000 and machine hours would be 8,000. The following information pertains to November of the current year: Job 10 Job 11 Work-in-process, Nov. 1 $16,000 $26,000 November production activity: Materials requisitioned $4,000 $4,800 Direct labor cost $2,400 $3,600 Machine hours 400 700 Labor hours 120 180 Actual manufacturing overhead cost incurred in November was $61,000. Required: Compute the predetermined overhead application rate. Determine the total cost associated with Job 10. Determine the total cost associated with Job 11.
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.
Matriarch Incorporated uses a
At the beginning of the year, the company estimated manufacturing overhead for the year would be $240,000 and machine hours would be 8,000.
The following information pertains to November of the current year:
|
Job 10 |
Job 11 |
|||
|
Work-in-process, Nov. 1 |
$16,000 |
$26,000 |
||
|
November production activity: |
||||
|
Materials requisitioned |
$4,000 |
$4,800 |
||
|
Direct labor cost |
$2,400 |
$3,600 |
||
|
Machine hours |
400 |
700 |
||
|
Labor hours |
120 |
180 |
Actual
Required:
- Compute the predetermined overhead application rate.
- Determine the total cost associated with Job 10.
- Determine the total cost associated with Job 11.
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