Activity Cost Pool Machine setups Special processing General factory Activity Cost Pool Activity Measure Number of setups Machine-hours Direct labor-hours Machine setups Special processing General factory Activity Rate Estimated Overhead Cost $ 30,000 $ 121,500 $ 756,000 Required: 1. Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.) per setup per MH per DLH Estimated Activity Rims 100 6,000 8,100 Posts 50 0 37,500 Total 150 6,000 45,600
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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Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow:
Rims
Posts
Direct Labor-
Hours per unit
0.30
0.50
Activity Cost Pool
Machine setups
Special processing
General factory
Additional information about the company follows:
a. Rims require $12 in direct materials per unit, and Posts require $10.
b. The direct labor wage rate is $20 per hour.
c. Rims are more complex to manufacture than Posts and they require special equipment.
d. The ABC system has the following activity cost pools:
Activity Cost Pool
Annual
Production
Machine setups
Special processing
General factory
27,000 units
75,000 units
Activity Measure
Number of setups
Machine-hours
Direct labor-hours
Activity Rate
Estimated
Overhead Cost
$ 30,000
$ 121,500
$ 756,000
per setup
per MH
per DLH
Estimated Activity
Required:
1. Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.)
Rims
100
6,000
8,100
Posts
50
0
37,500
Total
150
6,000
45,600](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F05cd34f9-5e43-4bc9-a142-43ab428a0bd3%2F1d3382a5-2a3a-41c2-ba76-62866e002790%2Fghfg7i_processed.jpeg&w=3840&q=75)
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