K t nces Rand Company computed the following activity rates using activity-based costing. Activity Setup Materials handling Inspection $ 60 per materials requisition $3 per unit inspected The company's deluxe model used the following activities to produce 1,000 units. Activity Setup Materials handling Inspection Activity Rate Activity Setup Materials handling Inspection $ 1,040 per setup Total allocated cost Units produced Overhead cost per unit 1,000 units inspected Compute the overhead cost per unit for the deluxe model using activity-based costing. Actual Activity Usage 2 setups 24 materials requisitions Activity Usage Activity Rate Allocated C
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.
Overheads are the indirect cost incurred to produce the goods or services. The overheads are not directly related to the production but these overheads are necessary to be incurred to run the business. The overheads can be allocated using the activity-based costing method.
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