Dawson Company manufactures small table lamps and desk lamps. The following shows the activities per product and the total overhead information: Units Setups Inspections Assembly (dlh) 5,000 3,400 11,000 6,800 Small table lamps Desk lamps Activity Setups Inspections Assembly (dlh) 9,600 16,000 10,200 25,600 73,500 Total Activity-Base Usage Budgeted Activity Cost $88,740 145,920 220,500 42,000 42,000 The total factory overhead to be allocated to desk lamps is Oa. $276,360 Ob. $359,268 Oc. $469,812 Od. $193,452
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.
Activity-based costing is used to distribute the unallocated overhead on the basis of activity. Other than this a pre-determined rate is also used to distribute the overhead. The predetermined overhead rate can be calculated on the bases of total manufacturing overhead and budgeted labor hours.
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