JYD Corporation produces three products. The production and cost data show the following: Product Peter Senen Ethel Units Produced 10,000 30,000 60,000 Direct Labor Hours 20,000 10,000 20,000 Number of setups 500 750 1,250 Number of shipments 1,000 1,125 1,375 Engineering change orders 75 50 25 Overhead costs include setups $450,000; shipping costs $700,000 and engineering costs $900,000. a. What would be the per unit overhead cost for product Senen if direct labor hours were the allocation base? b. What would be the per unit overhead cost of Product Peter if ABC were used? c. What would be the per unit overhead cost of Product Senen if ABC were used? d. What would be the unit overhead cost of Product Ethel if ABC were used?
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.
JYD Corporation produces three products. The production and cost data show the following:
| Product | |||
| Peter | Senen | Ethel | |
| Units Produced | 10,000 | 30,000 | 60,000 |
| Direct Labor Hours | 20,000 | 10,000 | 20,000 |
| Number of setups | 500 | 750 | 1,250 |
| Number of shipments | 1,000 | 1,125 | 1,375 |
| Engineering change orders | 75 | 50 | 25 |
a. What would be the per unit overhead cost for product Senen if direct labor hours were the allocation base?
b. What would be the per unit overhead cost of Product Peter if ABC were used?
c. What would be the per unit overhead cost of Product Senen if ABC were used?
d. What would be the unit overhead cost of Product Ethel if ABC were used?
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