ed on Jobs 101 and 102 $ 94,000 Indirect materials Used on multiple jobs 34,000 Hourly labor wages 750 hours @ $38 per hour 200 hours for Job 101 = $ 7,600 300 hours for Job 102 = 11,
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.
Fairfield company applies manufacturing
| Item | Description | Total Cost | |
|---|---|---|---|
| Direct materials | Used on Jobs 101 and 102 | $ 94,000 | |
| Indirect materials | Used on multiple jobs | 34,000 | |
| Hourly labor wages | 750 hours @ $38 per hour | ||
| 200 hours for Job 101 = | $ 7,600 | ||
| 300 hours for Job 102 = | 11,400 | ||
| 250 hours for Job 103 = | 9,500 | 28,500 | |
| Factory supervision | 4,800 | ||
| Production engineer | 8,800 | ||
| Factory janitorial work | 3,300 | ||
| Selling, general, and administrative salaries | 9,800 | ||
| Other manufacturing overhead costs (factory rent, insurance, |
8,300 | ||
| Other selling, general, and administrative costs (office rent, insurance, depreciation, etc.) | 6,800 |
Required:
- Post the preceding information to Fairfield Company’s Manufacturing Overhead T-account.
- Compute over- or underapplied manufacturing overhead.
Step by step
Solved in 3 steps
