Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate for each activity. (Round your answers to the nearest cent.) Setup Machine maintenance Next, select the formula to allocate overhead (OH) costs. Setup Machine maintenance Total activity-based costs Number of units + Activity-based cost per unit + + = Allocated mfg. overhead costs = = = Compute the total activity-based costs allocated to Product A, and then compute the cost per unit for Product A. Finally, compute the total activity-based costs allocated to Product B then compute the cost per unit for Product B. (Round the cost per unit to the nearest cent.) Product A Product B Predetermined OH allocation rate
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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