Activity-Based Costing: Factory Overhead Costs The total factory overhead for Bardot Marine Company is budgeted for the year at $937,950, divided into four activities: fabrication, $435,000; assembly $168,000; setup, $182,700; and inspection, $152,250. 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 7,250 dlh 21,000 dlh 52 setups 91 inspections Bass boat 21,750 7,000 383 634 29,000 dlh 28,000 dlh 435 setups 725 inspections Each product is budgeted for 4,500 units of production for the year. a. Determine the activity rates for each activity. Fabrication 15 per direct labor hour Assembly 6 per direct labor hour Setup 420 per setup Inspection 210 per inspection
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 Costing: Factory Overhead Costs
The total factory overhead for Bardot Marine Company is budgeted for the year at $937,950, divided into four activities: fabrication, $435,000; assembly,
$168,000; setup, $182,700; and inspection, $152,250. 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
7,250 dlh
21,000 dlh
52 setups
91 inspections
Bass boat
21,750
7,000
383
634
29,000 dlh
28,000 dlh
435 setups
725 inspections
Each product is budgeted for 4,500 units of production for the year.
a. Determine the activity rates for each activity.
Fabrication
15 per direct labor hour
Assembly
6 per direct labor hour
Setup
420 per setup
Inspection
210 per inspection
b. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar.
Speedboat
per unit
Bass boat
24
per unit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff357d594-48f9-4ade-924d-0fb81318c4b0%2F8831c387-96f9-49b8-9079-88ddb07c675f%2Fnn4etl9_processed.png&w=3840&q=75)
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