Teddy Inc. uses a job costing system. During the month of May, Teddy spent most of its time on job A50, which was started late in April. Following is cost information for job A50, other May costs, and relevant annual estimates. Direct Material Costs for job A50 for May Direct Labor Costs for Job A50 (300 DLH @ $20 per DLH) for May Actual Annual Overhead Actual Annual DLH Estimated Annual Overhead Estimated Annual DLH Required: (1) What is the predetermined overhead rate under normal costing? (2) What is the cost for May for job A50 assuming a normal costing system? (3) Calculate the under- or over-applied overhead for the year. $ 4,800 $ 6,000 $20,500 2,850 $22,500 2,500
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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