Achibald,Inc

question 19

Essay

Achibald,Inc.completed the production of 500 units with standard costs of $520 for direct materials and $75 for conversion costs.During the current year,it incurred $260,000 for direct materials and $44,000 for conversion costs.Record the adjusting entry for the amount of underallocated or overallocated conversion costs.

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Definitions:

Net Incomes

The total earnings of a company after all expenses and taxes have been deducted from total revenue.

Variable Costing

A pricing strategy that incorporates solely the variable costs associated with production—such as direct materials, direct labor, and variable manufacturing overhead—into the cost of goods sold, while omitting fixed overhead expenses.

Absorption Costing

A method of accounting that incorporates all costs associated with manufacturing, including direct materials, direct labor, as well as both variable and fixed overhead expenses, into the product's cost.

Variable Costing

A costing method that includes only variable manufacturing costs—direct labor, direct materials, and variable manufacturing overhead—in unit product cost.