Fulcrum Industries manufactures dining chairs and tables. The following information is available in December 2020: Dining Chairs Tables Total Cost Machine setups 200 600 $48,000 Inspections 250 470 $72,000 Labor hours 2,600 2,400 Fulcrum is considering switching from one overhead rate based on labor hours to activity-based costing. Instructions Perform the following analyses for these two components of overhead: a. Compute total machine setups and inspection costs assigned to each product, using a single overhead rate. b. Compute total machine setups and inspection costs assigned
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.
Fulcrum Industries manufactures dining chairs and tables. The following information is available in December 2020:
Dining Chairs Tables Total Cost
Machine setups 200 600 $48,000
Inspections 250 470 $72,000
Labor hours 2,600 2,400
Fulcrum is considering switching from one
Instructions
Perform the following analyses for these two components of overhead:
a. Compute total machine setups and inspection costs assigned to each product, using a single overhead rate.
b. Compute total machine setups and inspection costs assigned to each product, using activity-based costing.
c. Comment on your findings.
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how to get value of activity rate and total activity for machine setup and inspection? Please give detail step to get that value
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