
Concept explainers
Concept Introduction:
Job order costing is applied to the businesses which manufactured the product or provide the services according to the client’s order. As its names suggest, Job order costing is costing done for a particular job.
Predetermined
The Predetermined Overhead allocation rate is used to allocate the manufacturing overhead over the jobs. Predetermined Overhead allocation rate is calculated by dividing the Total Estimated overhead cost by the Total Estimated allocation base.
The formula to calculate the Predetermined Overhead allocation rate is as follows:
Requirement-1:
The Predetermined Overhead allocation rate for the year
Requirement -2:
To Prepare: The
Requirement -3:
To Prepare: The T accounts for Work in process inventory and finished goods inventory
Requirement -4:
To show: The Cost of unfinished housed matching with the ending balance in work in process inventory account
Requirement -5:
To show: The Cost of Finished houses not yet sold matching with the ending balance in finished goods inventory account
Requirement -6:
The gross profit on the houses sold and the costs that gross profit should cover

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Chapter 19 Solutions
ACCOUNTING PRINCIPLES V1 6/17 >C<
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