Acclaim Inc. makes two styles of trophies, basic and deluxe, and operates at capacity. ACciam does iarge custom orders. Acclaim budgets to produce 10,000 basic trophies and 5,000 deluxe trophies. Manufacturing takes place in two production departments: forming and assembly. In the forming department, indirect manufacturing costs are accumulated in two cost pools, setup and general overhead. In the assembly department, all indirect manufacturing costs are accumulated in one general overhead cost pool. The basic trophies are formed in batches of 200 but be- cause of the more intricate detail of the deluxe trophies, they are formed in batches of 50. The controller has asked you to compare plant-wide, department, and activity-based cost allocation. Acclaim Budgeted Intormation for the Year Ended November 30, 2017 Forming Department Basic S60,000 30,000 Deluxe $35,000 20,000 Total $95,000 50,000 Direct materials Direct manufacturing labor Overhead costs Setup 48,000 32,000 General overhead Assembly Department Total $15,000 Basic $5,000 15,000 Deluxe Direct materials $10,000 25,000 Direct manufacturing labor 40,000 Overhead costs General overhead 40,000
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.
Q.Calculate the budgeted unit cost of basic and deluxe trophies based on a single plant-wide
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