Hesson, Incorporated, manufactures and sells two products: Product F3 and Product FO. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Total Direct Labor- Hours Product F3 1,800 Product F0 1,000 Total direct labor-hours 2,800 The direct labor rate is $16.30 per DLH. The direct materials cost per unit for each product is given below: Product F3 Product F0 Direct Materials Cost per Unit $261.40 $187.50 Activity Cost Pools. Labor-related Machine setups Order size The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Expected Activity Overhead Cost $ 110,964 33,005 486, 720 $630,689 Expected Hours Per Production Unit 300 6.0 200 5.0 Direct Labor- Activity Measures DLHS setups MHS Product F3 Product FØ 1,800 1,000 300 200 3,100 2,900 Total 2,800 500 6,000 The unit product cost of Product F3 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)
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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