Casey Company has five activity cost pools and two products. It expects to produce 200,000 units of its automobile scissors jack and 80,000 units of its truck hydraulic jack. Having identified its activity cost pools and the cost drivers for each cost pool, Casey Company accumulated the following data relative to those activity cost pools and cost drivers. Expected Use of Cost Drivers per Product Hydraulic Annual Overhead Data Estimated Overhead Expected Use of Cost Drivers per Activity_ Scissors Activity Cost Pools Cost Drivers Jacks Jacks Ordering and receiving Purchase orders $ 200,000 Setups Machine hours Machine setup Machining Assembling Inspecting and testing 600,000 2,000,000 1,800,000 700,000 2,500 orders 1,200 setups 800,000 hours 1,000 500 300,000 1,800,000 20,000 1,500 700 500,000 1,200,000 15,000 Parts 3,000,000 parts 35,000 tests Tests $5,300,000 Required: Using ABC Calculate Per Unit and Total cost of Both Products also Comment?
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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