Muscat Manufacturing LLC has furnished the following information for the month of January 2020: Materials used is RO 5,000, Direct labor is RO 2,000, Labor hours worked is 1,000, Hours of machine operation is 800 and Overhead cost is RO 1,500. The department during the period has executed an order (job). The relevant information is as follows: Materials used is RO 1,000, Direct labor is RO 900, Labor hours worked is 300 and Hours of machines operation is 150. Calculate the overhead chargeable to the job based on direct labor hour rate. a. RO 300 b. RO 675 c. RO 450 d. RO 281
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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