Class Notes 3 - Applied overhead Overhead assigned to...

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Class Notes 2/10 Case Info Inc= x (p-vc)- fc X(30-10)-100000= X (30-6)- 200000 20x- 100000= 24x- 200000 4x=100000 X=25000 Chapter 5- job order costing Firms operating in job order industries produce a wide variety of services or products that are quite distinct from each other. Process production and costing- firms in process industries mass produce large quantities of similar products I.E Budweiser. Direct materials and labor are easy to trace to individual jobs. Overhead not easy to trace applied to production, estimate based on last year’s cost What is overhead? Indirect costs, indirect services, expenses related to costs you cannot see.
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Unformatted text preview: Applied overhead? Overhead assigned to individual jobs At the end of the year you would like to have no unapplied overhead. Driver- causes of overhead Problems- many costs are not incurred uniformly throughout the year, uneven production levels, fluctuating unit overhead costs Unit costs- important to valuing inventory, determining income, making important decisions. Applying overhead- calculate predetermined overhead rate, apply overhead, reconcile the difference between actual incurred and total applied to production Predetermined overhead rate= estimated annual overhead/ estimated annual activity level....
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