Candice Company uses activity-based costing to determine the unit product costs for external reports. The company has two products: Candy A and Candy B. The annual production sales of Candy A is 10,000 units and of Candy B is 4,000 units. There are three overhead activity centers, with estimated overhead costs and expected activity as follows Expected Activity Candy B 150 Activity Est. Overhead Candy A Total 250 1,000 3,000 13. The overhead cost per unit of Candy A under activity-based costing is Activity 1 Activity 2 Activity 3 25,000 65,000 90,000 100 200 800 1,000 2,000
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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