10. Shipping. The wine is shipped to distributors and private retailers. 11. Heating and air-conditioning of plant and offices. 12. Maintenance of production equipment. Repairs, replacements, and general maintenance are performed in the off-season. Instructions For each of Rojas Vineyards' activity cost pools, identify a probable cost driver that might be used to assign overhead costs to its three wine- varieties.
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.
Activity Cost Drivers
Activity cost drivers are elements that influence how much of a resource an activity uses. Activity cost drivers are used in the context of cost accounting to allocate overhead expenses to goods, services, or projects in a manner that reflects the consumption of those costs by each of them. In order to appropriately depict the overall cost of a good, a service, or a project—which is crucial for pricing, budgeting, and cost control—this helps.
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