Idris Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows: Budgeted Activity Cost Activity Activity Base Casting Machine hours Assembly Direct labor hours Inspecting Number of inspections Setup Number of setups Materials handling Number of loads Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow: Activity Casting Assembly Inspecting $210,680 146,160 18,810 47,950 46,000 Activity Base Machine hours Direct labor hours Number of inspections Number of setups Number of loads Units produced 9,600 4,800 a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar. Activity Rate Entry 4,850 4,180 1,300 280 790 Dining 4,310 6,260 410 70 210 Total 9,160 10,440 1,710 350 1,000 14,400 per machine hour. per direct labor hour per inspection
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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