The following cost data relate to the manufacturing activities of the Kookabuka Company during the most recent year: manufacturing overhead costs incurred during the year: property taxes 1600 utilities, factory 2600 indirect labour 5100 depreciation, factory 13,000 insurance, factory 2500 total actual costs 24,800 other costs incurred during the year: purchases of raw materials 15,000 direct labour cost 22,000 inventories: raw materials, beginning 5000 raw materials, ending 4400 work in process, beginning 3500 work in process, ending 4500 The company uses a predetermined overhead rate to charge overhead cost to production. The rate for the year just completed was $4.00 per machine hour; a total of 6,000 machine hours were recorded for the year.Required:a. Compute the amount of under- or overapplied overhead cost for the year just ended. b. Prepare a schedule of cost of goods manufactured 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 the Kookabuka Company during the most recent year:
property taxes 1600
utilities, factory 2600
indirect labour 5100
insurance, factory 2500
total actual costs 24,800
other costs incurred during the year:
purchases of raw materials 15,000
direct labour cost 22,000
inventories:
raw materials, beginning 5000
raw materials, ending 4400
work in process, beginning 3500
work in process, ending 4500
The company uses a predetermined overhead rate to charge overhead cost to production. The rate for the year just completed was $4.00 per machine hour; a total of 6,000 machine hours were recorded for the year.
Required:
a. Compute the amount of under- or overapplied overhead cost for the year just ended.
b. Prepare a schedule of cost of goods manufactured for the year.
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