Assembly Department at the end of the year just ended
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.
Nafth Company has an Equipment Services Department that performs all needed maintenance work on the equipment in the company's Fabrication and Assembly Departments. Costs of the equipment Services Department are charged to the Fabrication and Assembly Departments on the basis of direct labor-hours. Data on direct labor-hours for last year follow:
| Fabrication | Assembly | Total | |
|---|---|---|---|
| Budgeted direct labor-hours | 30,000 | 60,000 | 90,000 |
| Actual direct labor-hours | 35,000 | 65,000 | 100,000 |
| Peak-period direct labor-hours | 40,000 | 80,000 | 120,000 |
For the year just ended, the company budgeted its variable maintenance costs at $310,000 for the year. Actual variable maintenance costs for the year totaled $355,000.
For performance evaluation purposes, how much of the $355,000 of actual variable maintenance cost should be charged to the Assembly Department at the end of the year just ended? (Do not round your intermediate calculations.)
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