12) Extreme Manufacturing Company provides the following ABC costing information: Total Costs Activity-cost $280,000 $350,000 $93,750 $29,000 $752,750 drivers Account inquiry Account billing 14,000 hours 7,000,000 lines Account verification accounts 50,000 accounts Correspondence letters Total costs 4,000 letters Dr. Audeh A 3 The above activities are used by Departments A and Bas follows: Department A Department B Account inquiry hours Account billing lines 2100 hours 3600 hours 500,000 lines 7,000 accounts 350,000 lines Account verification accounts 5,000 accounts Correspondence letters 1200 letters 1600 letters How much of the total costs will be assigned to Department A? A) $88,825 B) $118,825 C) $120,000 D) $85,075
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.
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