Activity Budgeted Overhead Cost Budgeted Activity Handling materials $ 625,000 100,000 parts Quality inspection 90,000 1,500 inspections Purchasing 25,000 1,000 orders Total $ 740,000 1. Compute a single plantwide overhead rate assuming that the company allocates overhead cost based on 10,000 budgeted direc
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.
| Activity | Budgeted |
Budgeted Activity | |
|---|---|---|---|
| Handling materials | $ 625,000 | 100,000 | parts |
| Quality inspection | 90,000 | 1,500 | inspections |
| Purchasing | 25,000 | 1,000 | orders |
| Total | $ 740,000 |
1. Compute a single plantwide overhead rate assuming that the company allocates overhead cost based on 10,000 budgeted direct labor hours.
2. The standard model uses 5 direct labor hours per unit, and the fast model uses 10 direct labor hours per unit. Compute overhead cost per unit for each model.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
