19-Assume that ABC LLC is producing 40000 units of Product A. The direct material cost per unit is OMR50, direct labor cost per unit OMR 10, direct labor hours per unit 2 hours, machine hours per unit 5 hours, No. of purchase requisitions 1000 and No. of machine set-ups 100 . Production overhead split by activity : Receiving and inspection RO 1,500,000 and Production scheduling/set up : RO 1,750,000. Number of batch received/inspected 2000 and No. of batches for scheduling/set up 500. From the following given options identify receiving/ inspecting cost driver rate. a. OMR 750 b. OMR 1000 c. None of the given options d. OMR 800
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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