Lucern Company reports the following for its overhead costs for the year. Budgeted Cost Budgeted Activity Driver $ 26,000 65 design changes 34,600 3,460 machine hours 61,500 410 setups Activity Engineering support Electricity. Setup 1. Compute the activity rate for each activity cost pool using activity-based costing. 2. The company's Pro model used these activities to produce 1,250 units during the year: 3 design changes, 160 machine hours, and 16 setups. Allocate overhead costs to the Pro model and compute overhead cost per unit using activity-based costing. 1. Compute overhead activity rates Activity Engineering support Electricity Setup Activity Engineering support Electricity Budgeted Cost 2. Allocate overhead to Pro model and compute overhead per unit Activity Usage Setup Total Units produced Overhead per unit Budgeted Activity Activity Rate Activity Rate Allocated Cost
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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