Product Costing and Cost Accumulation in a Production Environment

Learning Objectives:

• Compute a predetermined overhead rate and explain its use in job-order costingfor job-shop and batch-production environments. (MO  3)

For this discussion board, you should apply your knowledge of POHR and application to job order records to answer the questions. You need to answer all questions for full credit.

Instructions (answer each question using approximately 100 words):

POHR is based on two estimates:

• Total expected MO.
• Total expected cost driver.

1. How likely is it that POHR is applied correctly?
2. What happens when POHR is underapplied (too little added as MO to the job sheets) or overapplied (too much applied to the job sheets)? (I am looking for the affect on what management might do. You may want to refer to the first PPT of this module on Product Costing that discusses how product costing affects managers.)
3. Which is worse (under or over)?

Module 3: Discussion 2-Service Industry Applications (Pages 108-110)

Learning Objectives:

• Describe the process of project costing used in service industry firms and nonprofit organizations. (MO  4)

Use the enterprise you selected – Apple, Inc. Company.

Remember to not use the name of your enterprise or any employees in your responses. You need to answer all questions for full credit and also respond to two posts.

Instructions (answer each question using approximately 100 words):

1. What driver or drivers would you use to allocate overhead costs to the enterprise?
2. Are metrics for this driver readily available? Where?
3. How would you keep track of the units of the driver on each job?