P2-11 Copenhagen Company uses a job order cost system. Factory overhead is applied to jobs using a predetermined rate based on direct labor hours. At the beginning of the year, the estimated factory overhead and direct labor hours were P480,000 and 12,000 hours, respectively. During the year, Copenhagen incurred total actual factory overhead of P475,000 and 11,500 direct labor hours. Among the job orders received during the year, Job #902 comprising of 100 units of finished products was completed with total materials cost of P5,000 and direct labor cost of P12,300 at P41 per hour. Required: a. Calculate the predetermined overhead rate. b. Calculate the total amount of overhead charged to all jobs during the year. Calculate the amount of under- or overapplied overhead of the year.. d. Calculate the unit cost of Job #902. C.
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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