National Inc. manufactures two models of CMD that can be used as cell phones, MPX, and digital camcorders. Model Annual Salesin Units High F 12,000 Great P 17,000 National uses a volume-based costing system to apply factory overhead based on direct labor dollars. The unit prime costs of each product were as follows: High F Great P Direct materials $ 40.00 $ 27.40 Direct labor $ 19.60 $ 15.20 Budget factory overhead: Engineering and Design 2,800 engineering hours $ 420,000 Quality Control 13,230 inspection hours 326,000 Machinery 34,110 machine hours 610,560 Miscellaneous Overhead 26,790 direct labor hours 133,000 Total $ 1,489,560 National's controller had been researching activity-based costing and decided to switch to it. A special study determined National's two products have the following budgeted activities: High F Great P Engineering and design hours 1,160 1,640 Quality control inspection hours 5,840 7,390 Machine hours 20,480 13,630 Labor hours 12,200 14,590 Using the firm's volume-based costing, applied factory overhead per unit for the Great P model is: (Rounded to the nearest cent.)
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.
National Inc. manufactures two models of CMD that can be used as cell phones, MPX, and digital camcorders.
| Model | Annual Sales in Units |
| High F | 12,000 |
| Great P | 17,000 |
National uses a volume-based costing system to apply factory
| High F | Great P | |||||
| Direct materials | $ | 40.00 | $ | 27.40 | ||
| Direct labor | $ | 19.60 | $ | 15.20 | ||
| Budget factory overhead: | |||||
| Engineering and Design | 2,800 | engineering hours | $ | 420,000 | |
| Quality Control | 13,230 | inspection hours | 326,000 | ||
| Machinery | 34,110 | machine hours | 610,560 | ||
| Miscellaneous Overhead | 26,790 | direct labor hours | 133,000 | ||
| Total | $ | 1,489,560 | |||
National's controller had been researching activity-based costing and decided to switch to it. A special study determined National's two products have the following budgeted activities:
| High F | Great P | |
| Engineering and design hours | 1,160 | 1,640 |
| Quality control inspection hours | 5,840 | 7,390 |
| Machine hours | 20,480 | 13,630 |
| Labor hours | 12,200 | 14,590 |
Using the firm's volume-based costing, applied factory overhead per unit for the Great P model is: (Rounded to the nearest cent.)
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