Bonita, Inc. decided to implement the activity-based costing approach and was quite successful in its use. However, the controller is wondering if instead of only two activity cost pools, they should expand to three activity cost pools based on the following: Direct labor costs Machine hours Setup hours Packaging hours Machining Machine set up Packaging S The estimated overhead of $460,800 is allocated as follows: machining activity cost pool $245,760, machine set up $174,080 and packaging $40,960. S Determine the overhead rates using the activity-based costing approach with three cost pools. (Round answers to 2 decimal places, eg. 15.25.) S Family Model $76,800 2,000 Family model S Difference S Deluxe model S 200 50 Deluxe Model $153,600 The additional cost pool 2,000 800 Overhead Rate 75 (2) Calculate the overhead allocation for the family model and the deluxe model using three activity cost pools. Overhead Allocation per hour per hour per hour What is the difference in allocation between two activity cost pools and three activity cost pools? Is the difference in allocation worth using the third activity cost pool? the overhead cost allocation significantly.
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.
bonita, inc. decided to implement the activity-based costing approah and was quite successful in its use. However, the controller is wondering if instead of only two activity cost pools, they should expand to three activity cost pools based on the following:
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 2 images
