Pocono Cement Forms expects $1,120,000 in overhead during the next year. It does not know whether it should apply overhead on the basis of its anticipated direct labor hours of 70,000 or its expected machine hours of 35,000. Determine the product cost under each predetermined allocation rate if the last job incurred $1,550 in direct material cost, 78 direct labor hours, and 65 machine hours. Wages are paid at $14 per hour. Labor Hours Machine hours Cost of the job $fill in the blank 1 $fill in the blank 2
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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Pocono Cement Forms expects $1,120,000 in
overhead during the next year. It does not know whether it should apply overhead on the basis of its anticipated direct labor hours of 70,000 or its expected machine hours of 35,000.Determine the product cost under each predetermined allocation rate if the last job incurred $1,550 in direct material cost, 78 direct labor hours, and 65 machine hours. Wages are paid at $14 per hour.
Labor Hours Machine hours Cost of the job $fill in the blank 1 $fill in the blank 2
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