Royal Furniture Co. uses a job - order costing system with a single plantwide predetermined overhead rate based on machine - hours. The company based its predetermined overhead rate for the current year on total estimated manufacturing overhead cost of $ 600,000 and 40,000 machine - hours. The job sheet of Job F2412 shows that the number of units produced in this job order is 25 units. This job required 225 machine - hours and incurred direct materials cost of $ 350 and direct labor costs of $ 1,250. The unit product cost for Job F2412 is approximately: a. $ 375 b. $ 79 C. $ 73 d. None of the given answers. e. $ 199
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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