he total factory overhead for Diva-nation is budgeted for the year at $180,000, divided into four activities: cutting, $18,000; sewing, $36,000; setup, $96,000; and inspection, $30,000. Diva-nation manufactures two types of men's pants: jeans and khakis. The activity-base usage quantities for each product by each activity are as follows. Determine the a) activity rates for each activity and b) activity based factory overhead per unit for each product.: Each product is budgeted for 20,000 units of production for the year. Determine (a) the activity rates for each activity and (b) the activity based factory overhead per unit for each product.
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.
The total factory
four activities: cutting, $18,000; sewing, $36,000; setup, $96,000; and inspection, $30,000.
Diva-nation manufactures two types of men's pants: jeans and khakis. The activity-base usage
quantities for each product by each activity are as follows. Determine the a) activity rates for
each activity and b) activity based factory overhead per unit for each product.:
Each product is budgeted for 20,000 units of production for the year. Determine (a) the
activity rates for each activity and (b) the activity based factory overhead per unit for each
product.
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