Single Plantwide Factory Overhead Rate Kennedy Appliance Inc.'s Machining Department incurred $98,900 of factory overhead cost in producing hoses and valves. The two products consumed a total of 4,300 direct machine hours. Of that amount, hoses consumed 2,200 direct machine hours. Determine the total amount of factory overhead that should be allocated to hoses using machine hours as the allocation base. $
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.
Pre-determined overhead rates are used to allocate the manufacturing overheads. It can be located on the basis of different basis such as direct labor cost, direct labor hour, machine hour, etc. Other than this activity-based costing system is also used to allocate the overhead expense.
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