Sports Manufacturing Company produces baseball bats. They have recently moved from handcrafted bats to machine ro uced to lower the level of defects. At the beginning of the period the firm estimates that the total manufacturing overhead costs for that period will be $450,000. They also estimate direct labor hours to be 60,000 and machine hours for the period to be 50,000. Sports Manufacturing Company just received an order for 500 specially-ordered maroon bats for the baseball team. Each of these bats requires 3 machine hours. Calculate the amount of overhead which will be applied to the baseball team's job
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.
The question is based on the concept of Cost Accounting.
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