The following cost data relate to the manufacturing activities of Newberry Company during the just completed year: Total actual manufacturing OH costs incurred (including 15,000 of indirect materials) 353,000 Purchases of raw materials (both direct and Indirect) 250,000 Direct labor cost 135,000 Raw Materials, beg 10,000 Raw Materials, end 15,000 Work in Process, beg 20,000 Work in process, end 35,000 The company uses a predetermined overhead rate to apply manufacturing overhead cost to production. The predetermined overhead rate for the year was $15 per machine-hour. A total of 23,000 machine-hours were recorded for the year. Required: Compute the amount of underapplied or overapplied manufacturing overhead cost for the year.
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 following cost data relate to the manufacturing activities of Newberry Company during the just completed year:
| Total actual |
353,000 |
| Purchases of raw materials (both direct and Indirect) | 250,000 |
| Direct labor cost | 135,000 |
| Raw Materials, beg | 10,000 |
| Raw Materials, end | 15,000 |
| Work in Process, beg | 20,000 |
| Work in process, end | 35,000 |
The company uses a predetermined
Required: Compute the amount of underapplied or overapplied manufacturing overhead cost for the year.
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