Lucky Clothing creates and sells t-shirts that can be customized. The cost of sales order processing and shipping is calculated using activity-based costing at Lucky Clothing. The sales order processing activity has a $9 per sales order activity rate, and the shipping activity has a $18 per shipment activity rate. Lucky Clothing sold a total of 25,300 personalized t-shirts, including 4,000 orders and 1,300 shipping. The total activity cost is calculated through: Sales order activity costs = Number of orders * sales order activity rate = 4000*9 = $36,000Shipping Activity costs = Number of shipping * Shipping Activity rate= 1300*18 = $23400Total activity costs = Sales order activity costs + Shipping Activity costsWhile the per-unit sales order processing and shipping activity cost for customizable t-shirts is solved as follows:Per unit sales order processing costs = Sales order processing costs/ Number of t shirts = $36000 + $23400 = $59400 Per unit sales order processing costs = Sales order processing costs/ Number of t shirts = 36000/25300 = $1.42 per t shirt Per unit shipping cost = Shipping Activity costs/ Number of t shirts = 23400/25300 = $0.92 per t shirt In the problem set with its calculation, what are the factores that were nor considered for the time being and what could have been their impact on the outcome if they were considered? Pls help me with this one question :( ASAP thank you so muchand (B) the per-unit sales order processing and shipping activity cost for customizable t-shirts. Illustrate a computational solution. State your processes in a clear and logical fashion. (please help me :(
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.
Lucky Clothing creates and sells t-shirts that can be customized. The cost of sales order processing and shipping is calculated using activity-based costing at Lucky Clothing. The sales order processing activity has a $9 per sales order activity rate, and the shipping activity has a $18 per shipment activity rate. Lucky Clothing sold a total of 25,300 personalized t-shirts, including 4,000 orders and 1,300 shipping. The total activity cost is calculated through: Sales order activity costs = Number of orders * sales order activity rate = 4000*9 = $36,000
Shipping Activity costs = Number of shipping * Shipping Activity rate= 1300*18 = $23400
Total activity costs = Sales order activity costs + Shipping Activity costs
While the per-unit sales order processing and shipping activity cost for customizable t-shirts is solved as follows:
Per unit sales order
Per unit sales order processing costs = Sales order processing costs/ Number of t shirts
= 36000/25300 = $1.42 per t shirt
Per unit shipping cost = Shipping Activity costs/ Number of t shirts
= 23400/25300 = $0.92 per t shirt
In the problem set with its calculation, what are the factores that were nor considered for the time being and what could have been their impact on the outcome if they were considered? Pls help me with this one question :( ASAP thank you so much
and (B) the per-unit sales order processing and shipping activity cost for customizable t-shirts. Illustrate a computational solution. State your processes in a clear and logical fashion. (please help me :(
Step by step
Solved in 2 steps
