Required: What is the company's assembly department overhead rate using direct labor hours? The departmental overhead rate for Assembly
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.
![### Budgeted Data for Rafner Manufacturing
Rafner Manufacturing identified the following budgeted data in its two production departments:
#### Assembly Department
- **Manufacturing Overhead Costs:** $1,267,200
- **Direct Labor Hours (DLH):** 12,700 DLH
- **Machine Hours (MH):** 6,700 MH
#### Finishing Department
- **Manufacturing Overhead Costs:** $670,000
- **Direct Labor Hours (DLH):** 20,700 DLH
- **Machine Hours (MH):** 16,700 MH
### Required:
Calculate the company's assembly department overhead rate using direct labor hours.
#### Calculation Table:
**The departmental overhead rate for Assembly**
- A table with empty rows for computation of the overhead rate using the formula:
\[
\text{Overhead Rate} = \frac{\text{Manufacturing Overhead Costs}}{\text{Direct Labor Hours}}
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