Activity Cost Pool Labor-related Purchase orders Product testing Template etching General factory Activity Cost Pool Labor-related (DLHS) Purchase orders (orders) Product testing (tests) Template etching (templates) General factory (MHs) Activity Measure Direct labor-hours Number of orders Number of tests Number of templates Machine-hours 2. The expected activity for the year was distributed among the company's four products as follows: Product A Product B Product C Product D Cost $ 19,250 $ 1,820 $ 6,320 $ 960 $ 68,600 Total Overhead Cost Expected Activity 1,375 DLHS 455 orders 395 tests 40 templates Product A Product B 650 Product C Product D 300 125 300 20 65 180 190 250 65 80 0 26 4 3,800 2,000 2,800 Using the ABC data, determine the total amount of overhead cost assigned to each product. Expected Activity 9,800 MHS 10 1,200
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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Activity Cost Pool
Labor-related
Purchase orders
Product testing
Template etching
General factory
Activity Cost Pool
Labor-related (DLHS)
Activity Measure
Direct labor-hours
Number of orders
Number of tests
Number of templates
Machine-hours
Product A
Product B
Product C
Product D
Cost
$ 19,250
$ 1,820
$ 6,320
$ 960
$ 68,600
Total Overhead
Cost
2. The expected activity for the year was distributed among the company's four products as follows:
Expected Activity
1,375 DLHS
Expected Activity
Product A
Product B Product C Product D
300
650
125
300
20
65
180
190
Purchase orders (orders)
Product testing (tests)
65
0
80
Template etching (templates)
250
0
26
10
4
General factory (MHs)
3,800
2,000
1,200
2,800
Using the ABC data, determine the total amount of overhead cost assigned to each product.
455 orders
395 tests
40 templates
S
9,800 MHs"
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