Activity Cost Pools Assembly Processing orders Inspection Estimated Overhead Cost $ 517,520 $ 63,763 $ 87,089 Annual number of orders Annual inspection hours Direct materials cost Direct labor cost Data concerning the company's product L19B appear below: Annual unit production and sales Annual machine-hours Expected Activity 53,500 machine-hours 2,050 orders 2,060 inspection-hours 620 1,180 260 210 $56.74 per unit $29.45 per unit According to the activity-based costing system, the unit product cost of product L19B is closest to: (Round your intermediate calcu to 2 decimal places.)
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.
The question is based on the concept of Cost Accounting.
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