Activity-based costing:factory overhead costs The total factory overhead for Cypress Marine Company is budgeted for the year at $620,700, divided into four activities: fabrication, $252,000, assembly, $114,000, setup, $137,700, and inspection, $117,000. Cypress Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows: Inspection Speedboat Bass boat Fabrication Assembly Setup Fabrication Speedboats s Bass Boats 4,500 dih 13,500 18,000 dih Assembly 14,250 dih 4,750 19,000 dih per unit per unit Setup 32 setups Each product is budgeted for 3,500 units of production for the year. a. Determine the activity rates for each activity. per dih per dih per setup Inspection per inspection b. Determine the activity-based factory overhead per unit for each product. Round all per unit answers to the nearest dollar. 238 270 setups 56 Inspections 394 450 inspections
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.
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