Product costing—manufacturing overhead Nautical Accessories, Inc.,manufactures women’s boating hats. Manufacturing overhead is assigned to production on a machine-hour basis. For 2013, it was estimated that manufacturing overhead would total $359,520 and that 21,400 machine hours would be used.Required:a. Calculate the predetermined overhead application rate that will be used for absorption costing purposes during 2013.b. During April, 3,900 hats were made. Raw materials costing $6,240 were used, and direct labor costs totaled $9,165. A total of 780 machine hours were worked during the month of April. Calculate the cost per hat made during April.c. At the end of April, 1,050 hats were in ending inventory. Calculate the cost of the ending inventory and the cost of the hats sold during April.
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.
Product costing—manufacturing
manufactures women’s boating hats. Manufacturing overhead is assigned to production on a machine-hour basis. For 2013, it was estimated that manufacturing overhead would total $359,520 and that 21,400 machine hours would be used.
Required:
a. Calculate the predetermined overhead application rate that will be used for absorption costing purposes during 2013.
b. During April, 3,900 hats were made. Raw materials costing $6,240 were used, and direct labor costs totaled $9,165. A total of 780 machine hours were worked during the month of April. Calculate the cost per hat made during April.
c. At the end of April, 1,050 hats were in ending inventory. Calculate the cost of the ending inventory and the cost of the hats sold during April.
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