Elite Ltd produces custom machine parts on a job order basis. The company has two direct product cost categories: direct materials and direct labour. In the past, indirect manufacturing costs were allocated to products using a single indirect cost pool, allocated based on direct labour hours. The indirect cost rate was $115 per direct labour hour The company recently adopted an Activity-Based Costing (ABC) system. The manufacturing process has been organised into four activities. The following list indicates the activities, cost drivers, and cost allocation rates. Save Antweed Activity Cost Driver Cost per unit of cost driver Materials Handling Number of parts $1.20 per part Milling and Assembly Machine hours $20.00 per hour Inspection Number of units produced $25.00 per unit Shipping Number of orders shipped. $1500.00 per order The company's information system automatically collects the necessary data for their above mentioned activities. The data for two recently completed jobs are shown below. Job order 410 Job order 411 $59,900 Direct material cost $9,700 $11,250 $750 Direct labour cost Close Window Save All Answers
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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Elite Ltd produces custom machine parts on a job order basis. The company has two direct product cost categories: direct materials and direct labour. In the past, indirect.
manufacturing costs were allocated to products using a single indirect cost pool, allocated based on direct labour hours. The indirect cost rate was $115 per direct labour hour.
The company recently adopted an Activity-Based Costing (ABC) system. The manufacturing process has been organised into four activities. The following list indicates the activities,
cost drivers, and cost allocation rates.
Activity
Cost Driver
Cost per unit of cost driver
Materials Handling
Number of parts
$1.20 per part
Milling and Assembly
Machine hours
$20.00 per hour
Inspection
Number of units produced
$25.00 per unit
Shipping
Number of orders shipped.
$1500.00 per order
The company's information system automatically collects the necessary data for their above mentioned activities. The data for two recently completed jobs are shown below.
Job order 410
Job order 411
$59,900
$9,700
Direct material cost
$11,250
$750
Direct labour cost
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Remaining Time: 2 hours, 05 minutes, 43 seconds.
Question Completion Status:
Shipping
Number of orders shipped
$1500.00 per order
The company's information system automatically collects the necessary data for their above mentioned activities. The data for two recently completed jobs are shown
Job order 410
Job order 411
Direct material cost
$9,700
$59,900
Direct labour cost
$750
$11,250
Number of direct labour hours
25
375
Number of parts
500
2,000
Number of machine hours
150
1050
Number of orders shipped
1.
200
Number of units produced
10
Required:
a. Compute the'manufacturing cost per unit for job orders 410 and 411 under the old, traditional costing system. .
b. Under the new ABC system, calculate the manufacturing cost per unit for job orders 410 and 411.
*Please indicate which question you are answering for each.
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11:24 A
O 30°C Rain showers
8/18/202
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