The Orel manufactures products in two departments: Mixing and Packaging. The company allocates manufacturing overhead using a single plantwide rate with direct labor hours as allocation base. Estimated overheard costs for the year are $828,000, and estimated direcr labor hours are 360,000. In October, the company incurred 20,000 direct labor hours. Requirement 1. Compute the predetermined overhead allocation rate. Round to two decimal places. Begin by selecting the formula to calculate the predetermined overheard (OH) allocation rate. Then enter the amounts to compute the allocation rate. Requirement 2. Determine the amount of overheard allocated in October.Begin by selecting the formula to allocate overheard costs. The overheard allocated in October is _________
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 Orel manufactures products in two departments: Mixing and Packaging. The company allocates manufacturing
Requirement 1. Compute the predetermined overhead allocation rate. Round to two decimal places.
Begin by selecting the formula to calculate the predetermined overheard (OH) allocation rate. Then enter the amounts to compute the allocation rate.
Requirement 2. Determine the amount of overheard allocated in October.Begin by selecting the formula to allocate overheard costs.
The overheard allocated in October is _________
Overheads are considered as fixed and common expenses that should be allocated to the products on the basis of different methods. Activity level allocation is one of the best methods for allocation.
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