Dawson Company manufactures small table lamps and desk lamps. The following shows the activities per product and the total overhead information: Small table lamps Desk lamps Activity Setups Inspections Assembly (dlh) Units Setups 3,000 8,000 6,000 16,000 Total Activity-Base Usage 24,000 24,000 28,000 Inspections Assembly (dlh) 9,000 16,000 15,000 12,000 Budgeted Activity Cost $60,000 120,000 280,000 The total factory overhead to be allocated to desk lamps is a. $306,667 b. $230,000 c. $225,000 d. $235,000
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.
Dawson Company manufactures small table lamps and desk lamps. The following shows the activities per product and the total
Small table lamps Desk lamps
Activity
Setups Inspections Assembly (dlh)
Units Setups
3,000 8,000 6,000 16,000
Total Activity-Base Usage
24,000 24,000 28,000
Inspections Assembly (dlh)
9,000 16,000 15,000 12,000
Budgeted Activity Cost
$60,000 120,000 280,000
The total factory overhead to be allocated to desk lamps is
a. $306,667
b. $230,000
c. $225,000
d. $235,000
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