(ALC) is a service sector company that operates in the far Northern side of Armidale. Its 2022 books contain the following information: Number of employees - full-time: 11 Number of employees - part-time: 9 Overhead costs allocation base: Staff work-hours (total for full-time and part-time employees) are used as a basis for allocating direct and indirect costs to clients. Company books reveal the following information for 2016: Overhead costs Annual salary (each full-time employee) Annual salary (each part-time employee) Total staff hours (direct labor hours) Budgeted Actual $271,000 $301,000 $101,000 $111,000 $30,000 $31,000 51,000 61,000 Required: 1. Work out the the budgeted indirect-cost rate per dlh and budgeted direct-cost rate, respectively, per dlh? Assume all staff salaries are 'direct costs' (round to 2 decimal places) 2. What should be the amount charged to a client if the company uses a normal costing system, where the client has actually used 990 direct labor hours?
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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