Osborn Manufacturing uses a predetermined overhead rate of $19.00 per direct labor-hour. This predetermined rate was based on a cost formula that estimates $243,200 of total manufacturing overhead for an estimated activity level of 12,800 direct labor-hours. The company actually Incurred $241,000 of manufacturing overhead and 12,300 direct labor-hours during the perlod. Required: 1. Determine the amount of underapplied or overapplied manufacturing overhead for the perlod. 2. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold. Would the Journal entry to dispose of the underapplied or overapplied overhead increase or decrease the company's gross margin? By how much? 1. Manufacturing overhead by 2 The gross margin would by
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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