Bennett Ostdiek Company manufactures several different products. In its traditional costing system, overhead costs are allocated based on a predetermined rate using direct labor hours as the basis. The company recently switched to an activity-based costing system using different cost drivers for each of their two activities. Information is as follows: Estimated Activity Labor hours: Number of designs: 6,000 O $42.24 O $360.00 O $484.00 100,000 O $308 24 Job #16 required 22 labor hours and 3 designs. What would be the cost of Job #16 under the traditional costing system? $264.00 Predetermined Overhead Rate $12 per labor hour $32 per design
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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