Q1. Yahya Company uses a job costing system with machine hours as the allocation base for overhead.The company uses normal costing to develop the overhead allocation rate.
The following data are available for the latest accounting period:
Estimated fixed factory overhead cost$200,000
Estimated machine-hours140,000
Actual fixed factory overhead cost incurred$220,000
Actual machine-hours used160,000
Jobs worked on:
Job No .Machine Hours Used
1040 17,000
1050 19,000
1060 12,000
1070 11,000
a. Compute the overhead allocation rate.
b.Choose one job for which you will find the overhead allocated.
c.Determine total over or underapplied overhead at the end of the year
Q 2 Give a numerical example explaining the concept of the Equivalent number of units. Discuss the advantages of using equivalent number f units?
Q 3 Give an example related to ABC costing and find the overhead allocation rate for this example using ABC Costing? Discuss the advantages of using ABC Costing?
Sample Solution