Question 4 Part II During the month of April, Advent Company had two jobs. The manufacturing costs incurred were: Raw materials purchased $ 48,000 Factory Labour Incurred $ 80,000 Manufacturing Overheads Incurred $ 64,800 Costs assignment to the jobs were as follows: Direct Materials: Job # Black $27,000 Job # White $21,000 Direct Labour: Job # Black $52,000 Job # White $28,000 The Advent Company took two jobs in June Job: Black and Job: White. The application rate for Manufacturing Overheads has been pre-determined as 80% of Direct Labour Costs. Required: a. Compute the total costs allocated to each Job. b. Compute the amount of over/under allocated overheads.
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.
Question 4 Part II
During the month of April, Advent Company had two jobs. The
Raw materials purchased $ 48,000
Factory Labour Incurred $ 80,000
Manufacturing Overheads Incurred $ 64,800
Costs assignment to the jobs were as follows:
Direct Materials: Job # Black $27,000
Job # White $21,000
Direct Labour: Job # Black $52,000
Job # White $28,000
The Advent Company took two jobs in June Job: Black and Job: White. The application rate for
Manufacturing Overheads has been pre-determined as 80% of Direct Labour Costs.
Required:
a. Compute the total costs allocated to each Job.
b. Compute the amount of over/under allocated overheads.
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