Miramar Industries manufactures two products: A and B. The manufacturing operation involves three overhead activities-production setup, materials handling, and general factory activities. Miramar uses activity-based costing to allocate overhead to products. An activity analysis of the overhead revealed the following estimated costs and activity bases for these activities: Activity Cost Activity Base Production setup $250,000 Number of setups Material handling 150,000 Number of parts General overhead 80,000 Number of direct labor hours Each product's total activity in each of the three areas are as follows: Product A Product B Number of setups 100 300 Number of parts 40,000 20,000 Number of direct labor hours 8,000 12,000 What is the activity rate for materials handling? Oa. $1.50 per part Ob. $3.75 per part Oc. $7.50 per part Od. $2.50 per part
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.
![Miramar Industries manufactures two products: A and B. The manufacturing operation involves three
overhead activities-production setup, materials handling, and general factory activities. Miramar uses
activity-based costing to allocate overhead to products. An activity analysis of the overhead revealed the
following estimated costs and activity bases for these activities:
Activity
Cost
Activity Base
Production setup
$250,000
Number of setups
Material handling
150,000
Number of parts
General overhead
80,000
Number of direct labor hours
Each product's total activity in each of the three areas are as follows:
Product A
Product B
Number of setups
100
300
Number of parts
40,000
20,000
Number of direct labor hours
8,000
12,000
What is the activity rate for materials handling?
Oa. $1.50 per part
Ob. $3.75 per part
Oc. $7.50 per part
Od. $2.50 per part](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F15577b18-e181-41c7-b25c-c3806e00eeb1%2F1687a9ea-e595-45b3-944d-c2a890559cee%2F0isgw2.png&w=3840&q=75)
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