Larner Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Labor-related Machine-related Machine setups Production orders Shipments General factory Cost and activity data have been supplied for the following products: Direct labor-hours Activity Rates $ 8.00 per direct labor-hour $9.00 per machine-hour Direct materials cost per unit Direct labor cost per unit Number of units produced per year Machine-hours Machine setups Production orders Shipments $ 80.00 per setup $ 200.00 per order $190.00 per shipment $9.00 per direct labor-hour Unit product cost Total Expected Activity J78 J78 1,100 2,300 5 4 12 B52 30 30 B52 222 Required: Compute the unit product cost of each product listed above. (Do not round intermediate calculations. Round your answers to 2 decimal places.) J78 $7.50 $ 4.50 1,000 B5 $ 44 $4
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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