Exercise 4-3 (Algo) Compute ABC Product Costs [LO4-3] Larner Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates: Activity Rates $ 8.00 per direct labor-hour $9.00 per machine-hour Activity Cost Pool Labor-related Machine-related Machine setups Production orders Shipments $ 50.00 per setup. $ 100.00 per order $ 180.00 per shipment General factory $ 9.00 per direct labor-hour Cost and activity data have been supplied for the following products: Direct materials cost per unit Direct labor cost per unit Number of units produced per year Direct labor-hours Machine-hours Machine setups Production orders Shipments Unit product cost Total Expected Activity J78 378 900 2,900 4 8 12 B52 50 20 4 4 4 Required: Compute the unit product cost of each product listed above. (Do not round intermediate calculations. Round your answers to 2 decimal places.) B52 378 $ 4.50 $4.75 4,000 852 $ 45.00 $ 10.00 500
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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![Exercise 4-3 (Algo) Compute ABC Product Costs [LO4-3]
Larner Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system
contains the following six activity cost pools and activity rates:
Activity Rates
Activity Cost Pool
Labor-related
Machine-related
Machine setups
Production orders
$ 8.00 per direct labor-hour
$9.00 per machine-hour
$50.00 per setup
$ 100.00 per order
$180.00 per shipment
Shipments
General factory
$9.00 per direct labor-hour
Cost and activity data have been supplied for the following products:
Direct materials cost per unit
Direct labor cost per unit
Number of units produced per year
Direct labor-hours
Machine-hours
Machine setups
Production orders
Shipments
Unit product cost
Total Expected
Activity
J78
378
900
2,900
4
8
12
B52
50
20
4
4
Required:
Compute the unit product cost of each product listed above. (Do not round intermediate calculations. Round your
answers to 2 decimal places.)
B52
378
$ 4.50
$4.75
4,000
852
$ 45.00
$ 10.00
500](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2a689cb2-1294-4e12-bf28-a0c09d931242%2F49f39e82-c9b6-4231-a083-9afd3daa015b%2F74favkh_processed.jpeg&w=3840&q=75)
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