XYZ Company uses a job costing system and applies manufacturing overhead using a predetermined overhead rate based on direct labor hours. Information for the current year is as follows: Estimated manufacturing overhead OMR65,000; Actual manufacturing overhead OMR63,000; Estimated direct labor hours 20,000; Actual direct labor hours 22,000. The amount of over- or underapplied overhead for the year was Select one: O a. OMR2,000 underapplied O b. None of the answers given O c. OMR8,500 underapplied O d. OMR2,000 overapplied O e. OMR8,500 overapplied O f OMRZ7.500 overapplied
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.
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