Activity Setting up equipment Ordering costs Machine costs Direct materials Direct labor Units completed Direct labor hours Number of setups Number of orders Machine hours Receiving hours Expected Cost Activity Driver Activity Capacity Number of setups 510 Number of orders 18,700 41,400 9,000 952,200 Machine hours 405,000 Receiving hours eoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B $754,000 473,000 7,800 6,500 2,400 360 150 6,100 12,600 24,400 17,000 2,600 6,400 The company's normal activity is 8,900 direct labor hours. $407,490 374,000 -Model A Model B $593,000 478,000 16,800 Required: -Determine the unit cost for each model using direct labor hours to apply overhead. Round intermediate calculations and final answers to nearest cent. Unit Cost Determine the unit cost for each model using the four activity drivers. Round your answers to nearest cent. Unit Cost Model A Model B LWhich method produces the more accurate cost assignment?
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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