Ace Mining Tools Ltd. of Calgary makes specialty tools used in the mining industry. The company uses an ABC system for internal decision making. The company has four activity cost pools, as listed below: Activity Rate $ 17.60 per direct labour-hour $360.00 per customer order $ 79.00 per testing hour $750.00 per sales call Activity Cost Pool Order size Activity Measure Number of direct labour-hours Customer orders Number of customer orders Product testing Selling Number of testing hours Number of sales calls The managing director of the company would like information concerning the cost of a recently completed order for hard-rock dril The order required 100 direct labour-hours, 20 hours of product testing, and five sales calls. Required: 1. Prepare a report showing the overhead cost of the order for hard-rock drills according to the ABC system. What is the total over cost assigned to the order? Activity Cost Pool ABC Cost Order size $
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.
![Ace Mining Tools Ltd. of Calgary makes specialty tools used in the mining industry. The company uses an ABC system for internal
decision making. The company has four activity cost pools, as listed below:
Activity Rate
$ 17.60 per direct labour-hour
$360.00 per customer order
$ 79.00 per testing hour
$750.00 per sales call
Activity Cost Pool
Order size
Activity Measure
Number of direct labour-hours
Customer orders
Number of customer orders
Product testing
Selling
Number of testing hours
Number of sales calls
The managing director of the company would like information concerning the cost of a recently completed order for hard-rock drills.
The order required 100 direct labour-hours, 20 hours of product testing, and five sales calls.
Required:
1. Prepare a report showing the overhead cost of the order for hard-rock drills according to the ABC system. What is the total overhead
cost assigned to the order?
Activity Cost Pool
АВС Cost
Order size
$
Customer orders
Product testing
Selling
Total
%24](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F04655fa1-8a14-4287-9748-c095e4183a84%2F72e791ba-8e23-476e-9407-c14574f3cb9c%2F720kpi4_processed.png&w=3840&q=75)
![](/static/compass_v2/shared-icons/check-mark.png)
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
![Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
![Managerial Accounting: The Cornerstone of Busines…](https://www.bartleby.com/isbn_cover_images/9781337115773/9781337115773_smallCoverImage.gif)
![Cornerstones of Cost Management (Cornerstones Ser…](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
![Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
![Managerial Accounting: The Cornerstone of Busines…](https://www.bartleby.com/isbn_cover_images/9781337115773/9781337115773_smallCoverImage.gif)
![Cornerstones of Cost Management (Cornerstones Ser…](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
![Principles of Cost Accounting](https://www.bartleby.com/isbn_cover_images/9781305087408/9781305087408_smallCoverImage.gif)