Veronica Company allocates overhead costs to jobs on the basis of direct labor-hours. Its estirnated average monthly factory costs for 2005 were as follows: Direct material cost Direct labor cost Overhead cost Average Monthly Costs $ 60,000 300,000 180,000 Its estimated average monthly direct labor-hours are 20,000. Among the jobs worked on in November 2005 were two jobs, G and H, for which the following information was collected: Job G Job H Direct material cost Direct labor cost Direct labor-hours $10,000 28,000 2,400 $10,000 32,000 2,800
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.
Compute the total production costs of jobs G and H
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