Lily Corporation manufactures titanium and aluminum tennis racquets. Reynoso's total overhead costs consist of assembly costs and inspection costs. The following information is available regarding activity cost pools, estimated use of activities per product, and total estimated overhead costs: Activity Cost Pools Titanium Aluminum Total Cost Assembly 500 mach. hrs. 500 mach. hrs. $80000 350 150 $118000 Inspections 2100 labor hrs 1900 labor hrs. Lily is considering switching from one overhead rate based on labor hours to activity-based costing Total overhead costs assigned to titanium racquets computed using a single overhead rate are O $99000. $118000 $103950. $138600.
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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