The manufacturing company of Wellington has collected the given information to develop predetermined overhead rates for 2010. The firm produces a wide variety of energy- saving goods that are processed from 2 departments, Assembly (automated) and Finishing (labor intensive). Budgeted total direct labor hours: 10,000 in Assembly and 40,000 in Finishing · Budgeted total machine hours: 76,000 in Assembly and 4,000 in Finishing Budgeted total overhead: $600,400 in Assembly and $199,600 in Finishing a. Using direct labor hours, compute a plantwide predetermined OH rate. b. Using machine hours, compute a plantwide predetermined OH rate. c. Using machine hours for Assembly and direct labor hours for Finishing, compute departmental predetermined OH rates. d. Determine the amount of overhead that would be assigned to a product that required 5 machine hours in Assembly and 1 direct labor hour in Finishing using the answers developed in parts (a), (b), and (c).
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 manufacturing company of Wellington has collected the given information to develop
predetermined overhead rates for 2010. The firm produces a wide variety of energy-
saving goods that are processed from 2 departments, Assembly (automated) and
Finishing (labor intensive).
Budgeted total direct labor hours: 10,000 in Assembly and 40,000 in Finishing
Budgeted total machine hours: 76,000 in Assembly and 4,000 in Finishing
Budgeted total overhead: $600,400 in Assembly and $199,600 in Finishing
a. Using direct labor hours, compute a plantwide predetermined OH rate.
b. Using machine hours, compute a plantwide predetermined OH rate.
c. Using machine hours for Assembly and direct labor hours for Finishing, compute
departmental predetermined OH rates.
d. Determine the amount of overhead that would be assigned to a product that required
5 machine hours in Assembly and 1 direct labor hour in Finishing using the answers
developed in parts (a), (b), and (c).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F54f6ed20-1aeb-4508-be2b-23723172f7b0%2F4ce3fe3f-e432-41da-bb6a-06af95c232b0%2Faz4yo5p_processed.jpeg&w=3840&q=75)
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