Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin is $25 per unit and $40 is used in direct labor, while the direct material for the double is $45 per unit, and the labor cost is $50 per unit. Box Springs estimates it will make 5,000 twins and 10,000 doubles in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: Activity Cost Estimated Use per Use per Pools Driver Overhead Twin Double Framing Square Feet of Pine $210,000 6,000 1,000 Padding Square Feet of Quilting 220,000 120,000 100,000 Filling Square Feet of Filling 255,000 550,000 300,000 Labeling Number of Boxes 260,000 850,000 450,000 Inspection Number of Inspections 198,000 13,000 5,000 How much does each unit cost to manufacture? Do not round intermediate computations but round final answers for the fields below to the nearest whole number. Total Cost per Unit Twin Double Direct Material 25 45 Direct Labor Cost 40 50 V Overhead Total per Unit
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.
Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin is $25 per unit and $40 is used in direct labor, while the direct material for the double is $45 per unit, and the labor cost is $50 per unit. Box Springs estimates it will make 5,000 twins and 10,000 doubles in the next year. It estimates the
| Activity Cost Pools |
Driver | Estimated Overhead |
Use per Twin |
Use per Double |
| Framing | Square Feet of Pine | $210,000 | 6,000 | 1,000 |
| Padding | Square Feet of Quilting | 220,000 | 120,000 | 100,000 |
| Filling | Square Feet of Filling | 255,000 | 550,000 | 300,000 |
| Labeling | Number of Boxes | 260,000 | 850,000 | 450,000 |
| Inspection | Number of Inspections | 198,000 | 13,000 | 5,000 |
How much does each unit cost to manufacture? Do not round intermediate computations but round final answers for the fields below to the nearest whole number.
| Total Cost per Unit | Twin | Double |
| Direct Material | $fill in the blank 1 | $fill in the blank 2 |
| Direct Labor Cost | fill in the blank 3 | fill in the blank 4 |
| Overhead | fill in the blank 5 | fill in the blank 6 |
| Total per Unit | $fill in the blank 7 | $fill in the blank 8 |
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