Sharp Company manufactures a variety of electric razors for men and women. The company's plant is partially automated. Listed below is cost driver information used in the product-costing system: Budgeted Overhead Budgeted Cost Driver Overhead Cost Pool Cost Level Cost Driver $ 197,176 Machinery depreciation/maintenance Factory depreciation/utilities/insurance Product design Material handling 31,500 31,500 43,120 217,000 Machine hours 140,840 Machine hours Hours in design 676,032 1,295,728 Pounds of raw materials In addition, Sharp Company expects to spend $563,360 for 8,048 direct labor-hours. Two current product orders had the following requirements: Men's Razors Women's Razors Units produced and sold 18,000 25,000 Direct labor hours 30 40 Pounds of raw materials 581 471 Hours in design 20 23 Machine hours 64 49 What is the total manufacturing overhead assigned to the current order for Men's Razors if the firm uses a volume-based plant wide overhead rate based on direct labor dollars?
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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