ABC Co. produces 3 products with the following production and cost information: Model X Model Y Model Z Units produced Direct Labor hours Number of set ups Number of shipments Engineering change orders 2,000 4,000 6,000 2,000 13,000 4,000 100 150 250 200 225 275 15 10 Overhead costs include the following: Set up P45,000; Shipping P70,000 and Engineering P90,000. Using ABC method, the overhead cost per unit of Model X must be.
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.
Strategic Cost Management (Activity Based Costing)
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Using ABC method, solve for the
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