Feauto Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHS). The company has two products, 163E and E761, about which it has provided the following data: 163E E76I $22.20 $66.60 $17.50 Direct materials per unit Direct labor per unit Direct labor-hours per unit Annual production (units) 0.50 84,000 The company's estimated total manufacturing overhead for the year is $3,141,600 and the company's estimated total direct labor-hours for the year is 84,000. The company is considering using a form of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below: Activities and Activity Measures Assembling products (direct labor-hours) Preparing batches (batches) Product support (product variations). Total Direct labor-hours Batches Product variations Multiple Choice OOOO $50.82 $37.40 630 1,260 The manufacturing overhead that would be applied to a unit of product E761 under the activity-based costing system is closest to: $112.20 $ 52.50 1.50 28,000 $33.88 Expected Activity E761 163E 42,000 42,000 1,130 2,260 Estimated Overhead Cost $2,100,000 186,000 855,600 $ 3,141,600 Total 84,000 1,760 3,520
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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