Bonita Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100000 for the year. The following information is available regarding activity cost pools, cost drivers, total estimated overhead costs, and estimated use of activities per product: Activity Cost Pool Ordering and Receiving Machine Setup Machining Assembly Inspection Cost Driver Orders Setups Machine hours Parts Inspections Est. Overhead $ 80000 258500 1469500 1090000 350000 Cost Driver Activity 500 orders 450 setups 125000 MH 1000000 parts 500 inspections If overhead is applied using activity-based costing, the overhead application rate for ordering and receiving is
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 Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100000 for the year. The
following information is available regarding activity cost pools, cost drivers, total estimated overhead costs, and estimated use of
activities per product:
Activity Cost Pool
Ordering and Receiving
Machine Setup
Machining
Assembly
Inspection
Cost Driver
Orders
Setups
Machine hours
Parts
Inspections
Est. Overhead
$ 80000
258500
1469500
1090000
350000
Cost Driver Activity
500 orders
450 setups
125000 MH
1000000 parts
500 inspections
If overhead is applied using activity-based costing, the overhead application rate for ordering and receiving is](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fadfa93f3-2f01-4d0e-a09a-e44d84b16ba8%2F780aa13c-85f2-4e00-aa93-b9464af92e23%2Fwe50p5w_processed.jpeg&w=3840&q=75)
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