Nixon Machine Parts Inc.'s Fabrication Department incurred $132,500 of factory overhead cost in producing gears and sprockets. The two products consumed a total of 5,300 direct machine hours. Of that amount, sprockets consumed 2,100 direct machine hours. Determine the total amount of factory overhead that should be allocated to sprockets using machine hours as the allocation base. If required, round your answer to the nearest dollar.
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.
Nixon Machine Parts Inc.'s Fabrication Department incurred $132,500 of
Determine the total amount of factory overhead that should be allocated to sprockets using machine hours as the allocation base. If required, round your answer to the nearest dollar.
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