1. Compute an activity rate for each activity using activity-based costing.
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.
1. Compute an activity rate for each activity using activity-based costing.
![Required information
Use the following information for the Problems below. (Algo)
[The following information applies to the questions displayed below.]
Tent Master produces Pup tents and Pop-up tents. The company budgets $301,000 of overhead cost and 43,000 direct
labor hours. Additional information follows.
Selling Price
$ 80
Per Unit
Direct Materials
Direct Labor
$ 21
$ 46
Pup tent
Pop-up tent
75
22
28
Problem 4-3A (Algo) Using activity-based costing to allocate overhead cost, and compute overhead cost
per unit and gross profit per unit LO P3
Activity
Assembly
Electricity
Materials purchasing
Budgeted Cost
$ 215,000
25,000
61,000
$ 301,000
Activity Cost Driver
Direct labor hours (DLH)
Machine hours (MH)
Purchase orders (PO)
Budgeted
Activity Usage
43,000
10,000
500
Total](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fde73d8a3-703f-492e-8945-c6a65b8a92bf%2Fddde558c-fee4-42b0-b51e-612c457b8606%2Fa3gy1ca_processed.png&w=3840&q=75)
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