Radiator Springs Water Co. uses direct-labor hours as their sole overhead cost- allocation base. At the beginning of the year, they estimate manufacturing overhead costs will be $267,000, machine hours will be 35,000, and direct-labor hours will be 42,000 for 2021. At the end of the year, they determined manufacturing overhead was actually $284,000 and actual hours were 39,000 and 37,000 for machines and direct-labor, respectively. If RSW Co. uses normal costing, what was the pre-determined overhead rate for 2021? (round to the nearest cent)
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.
2
Step by step
Solved in 3 steps
