Red Industries produces computers and goes through two operations, Assembling and Packaging before it is ready to be sold to customers. Next year's expected costs and activities are shown below. Direct labor 401,000 DLH 99,000 hours Machine hours Data for Dept. Assembling Packaging Overhead costs 72,000 MH 80,000 MH $ 586,600 DLH $ 413,400 1. Compute Red's departmental overhead rate for the Assembling department based on direct labor hours. 2. Compute Red's departmental overhead rate for the Packaging department based on machine hours. 3, Compute a single plantwide rate based on machine hours.
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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