A local picnic table manufacturer has budgeted these overhead costs: Purchasing $63,000 Handling Materials 31,920 Machine Setups 64,400 Inspections 30,600 Utilities 25,500 They are considering adapting ABC costing and have estimated the cost drivers for each pool as shown: Cost Driver Activity Orders 700 Material Moves 1,330 Machine Setups 14,000 Number of Inspections 6,000 Square Feet 170,000 Recent success has yielded an order for 1,000 tables. Assume direct labor costs per hour of $25. Activity Order, Units 1,000 Direct Materials 112,800 Machine Hours 15,200 Direct Labor Hours 5,300 Number of Purchase Orders 70 Number of Material Moves 850 Number of Machine Setups 90 Number of Inspections 500 Number of Square Feet Occupied 9,000 Determine how much the job would cost given the following activities: Do not round intermediate computations and round final answers to nearest whole number. Cost Assigned Direct Materials $fill in the blank 1 Direct Labor fill in the blank 2 Number of Material Moves fill in the blank 3 Number of Machine Setups fill in the blank 4 Number of Inspections fill in the blank 5 Number of Square Feet Occupied fill in the blank 6 Total Order Cost $fill in the blank 7
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.
A local picnic table manufacturer has budgeted these
| Purchasing | $63,000 |
| Handling Materials | 31,920 |
| Machine Setups | 64,400 |
| Inspections | 30,600 |
| Utilities | 25,500 |
They are considering adapting ABC costing and have estimated the cost drivers for each pool as shown:
| Cost Driver | Activity |
| Orders | 700 |
| Material Moves | 1,330 |
| Machine Setups | 14,000 |
| Number of Inspections | 6,000 |
| Square Feet | 170,000 |
Recent success has yielded an order for 1,000 tables. Assume direct labor costs per hour of $25.
| Activity | |
| Order, Units | 1,000 |
| Direct Materials | 112,800 |
| Machine Hours | 15,200 |
| Direct Labor Hours | 5,300 |
| Number of Purchase Orders | 70 |
| Number of Material Moves | 850 |
| Number of Machine Setups | 90 |
| Number of Inspections | 500 |
| Number of Square Feet Occupied | 9,000 |
Determine how much the
| Cost Assigned | |||
| Direct Materials | $fill in the blank 1 | ||
| Direct Labor | fill in the blank 2 | ||
| Number of Material Moves | fill in the blank 3 | ||
| Number of Machine Setups | fill in the blank 4 | ||
| Number of Inspections | fill in the blank 5 | ||
| Number of Square Feet Occupied | fill in the blank 6 | ||
| Total Order Cost | $fill in the blank 7 |
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