Newcastle Computer Repair Services has overheads of £9,400 per month. Each month, 1,000 direct labour hours are worked and charged to specific jobs. The costs and time incurred on job number AXZ55263 were: Direct materials (£) Direct labour (hours) Wage rate (£ per hour) Overheads are charged to jobs on a direct labour hour basis. Required: Calculate the full cost of job number AXZ55263. 20.00 4 10.00 Firstly, the overhead absorption rate can be found by this formula: (Complete the necessary drop downs.) The values can now be inserted (calculate the overhead absorption rate to two decimal places): = £ per direct labour hour The full cost of job number AXZ55263 can now be calculated (give your answer to 2 decimal places): Direct materials Direct labour Overheads Full cost of the job £
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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