Deming Incorporated recently implemented an activity-based costing system. Total results from all products manufactured in the current year are: Activity cost pool Total cost Total activity Assembly $7,500 1,500 machine-hours Packaging $3,150 450 number of orders Quality control inspections $900 200 number of inspections Deming manufactures sprinkler heads for commercial applications. Annual production and sales of the Sizzler, one type of its heads, is 2,300 units. The following relates the the most recent year. Annual machine hours 1,000 Annual number of orders 125 Annual number of inspections 400 Direct materials cost per unit $15.00 Direct labor cost per unit $5.00 Calculate the average cost of one Sizzler. Select one: a. $24.43 per unit b. $34.32 per unit c. $22.17 per unit d. $23.34 per unit e. $18
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.
Deming Incorporated recently implemented an activity-based costing system. Total results from all products manufactured in the current year are:
Activity cost pool Total cost Total activity
Assembly $7,500 1,500 machine-hours
Packaging $3,150 450 number of orders
Quality control inspections $900 200 number of inspections
Deming manufactures sprinkler heads for commercial applications. Annual production and sales of the Sizzler, one type of its heads, is 2,300 units. The following relates the the most recent year.
Annual machine hours 1,000
Annual number of orders 125
Annual number of inspections 400
Direct materials cost per unit $15.00
Direct labor cost per unit $5.00
Calculate the average cost of one Sizzler.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 4 images
