2. Samsung Company is manufacturing various products like Laptops and Tablets etc., They are deciding whether to use job- order costing or activity based costing. Based on next year's budget, two cost pools have been developed with the following information: Particulars Laptops Tablets Overhead Assigned Direct labor hours 5000 10000 Sewing machine hours 500 300 OMR 400,000 Machine set up hours 100 400 OMR 200,000 1. Find out the pre-determined overhead rate if overhead is applied based on the direct labor hour rate. 2. calculated ABC costing Compare the cost between traditional and ABC 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.
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