Activity-Based Costing: Factory Overhead Costs The total factory overhead for Bardot Marine Company is budgeted for the year at $954,400, divided into four activities: fabrication, $456,000; assembly, $208,000; setup, $158,400; and inspection, $132,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows: Fabrication Assembly Setup Inspection Speedboat 6,000 dlh 19,500 dlh 43 setups 75 inspections Bass boat 18,000 6,500 317 525 24,000 dlh 26,000 dlh 360 setups 600 inspections Each product is budgeted for 3,500 units of production for the year. a. Determine the activity rates for each activity. Fabrication $fill in the blank 1 per direct labor hour Assembly $fill in the blank 2 per direct labor hour Setup $fill in the blank 3 per setup Inspection $fill in the blank 4 per inspection b. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar. Speedboat $fill in the blank 5 per unit Bass boat $fill in the blank 6 per unit
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.
Activity-Based
The total factory overhead for Bardot Marine Company is budgeted for the year at $954,400, divided into four activities: fabrication, $456,000; assembly, $208,000; setup, $158,400; and inspection, $132,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows:
| Fabrication | Assembly | Setup | Inspection | |||||
| Speedboat | 6,000 | dlh | 19,500 | dlh | 43 | setups | 75 | inspections |
| Bass boat | 18,000 | 6,500 | 317 | 525 | ||||
| 24,000 | dlh | 26,000 | dlh | 360 | setups | 600 | inspections |
Each product is budgeted for 3,500 units of production for the year.
a. Determine the activity rates for each activity.
| Fabrication | $fill in the blank 1 per direct labor hour |
| Assembly | $fill in the blank 2 per direct labor hour |
| Setup | $fill in the blank 3 per setup |
| Inspection | $fill in the blank 4 per inspection |
b. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar.
| Speedboat | $fill in the blank 5 per unit |
| Bass boat |
$fill in the blank 6 per unit
|
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