Heidelberg Fabrication manufactures two products, G-09 and G-35: Units produced Direct materials cost per unit Machine-hours per unit Production runs per quarter Machine depreciation Setup labor Materials handling Total G-09 18,300 a. Using current costing system b. Using proposed ABC system $7 4 144 Production at the plant is automated and any labor cost is included in overhead. Data on manufacturing overhead at the plant follow: $ 98,820 49,410 39,528 $ 187,758 G-09 Required: a. Compute the unit costs for the two products, G-09 and G-35, using the current costing system at Heidelberg (using machine-hour as the allocation basis). b. Compute the unit costs for the two products, G-09 and G-35, using the proposed ABC system at Heidelberg. Note: For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places. G-35 3,660 $ 19 Unit Cost 7 72 G-35
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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