Chipman Inc. produces water pumps. Overhead costs have been identified as follows: Activity Pool Material handling Machine maintenance Cost $ 72,800.00 $144,000.00 $ 85,215.00 Setups Activity Driver Number of moves Activity 455 Number of machine hours 36,000 Number of production runs 69 Chipman makes 3 models of pumps with the following details: Economy Standard Premium Units produced Number of moves 20,000 10,060 150 3,575 173 132 Machine hours 9,850 20,000 6,150 Production runs 31 10 28 Required: a. Calculate the activity rate for each activity. (Round your answers to 2 decimal places.) Activity Pool Activity Rate Material Handling Machine Maintenance Setups b. Determine the amount of indirect costs assigned to each of the products. (Do not round your intermediate calculations. Round your answers to 2 decimal places.) Models Cost Economy Standard Premium
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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