Odyssey Inc. has a total of $2,362,500 in production overhead costs. The company’s products and related statistics follow. Product A Product B Direct material in pounds 139,500 190,500 Direct labor hours 30,000 37,500 Machine hours 52,500 22,500 Number of setups 430 860 Number of units produced 15,000 7,500 Additional data: The 330,000 pounds of material were purchased for $544,500. One direct labor hours costs $12. a. Assume that Odyssey Inc. uses direct labor hours to apply overhead to products. Determine the total cost for each product and the cost per unit. Note: Round your final answers to two decimal places (i.e. round $4.355 to $4.36). Product A Product B Total cost Total cost per unit b. Assume that Odyssey Inc. uses machine hours to apply overhead to products. Determine the total cost for each product and the cost per unit. Note: Round your final answers to two decimal places (i.e. round $4.355 to $4.36). Product A Product B Total cost Total cost per unit c. Assume that Odyssey Inc. uses the following activity centers, cost drivers, and costs to apply overhead to products: Cost Pool Cost Driver Cost Utilities # of machine hours $750,000 Setup # of setups 193,500 Material handling # of pounds of material 1,419,000 Determine the total cost for each product and the cost per unit. Note: Round your final answers to two decimal places (i.e. round $4.355 to $4.36). Product A Product B Total cost Total cost per unit
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.
Odyssey Inc. has a total of $2,362,500 in production
| Product A | Product B | |
|---|---|---|
| Direct material in pounds | 139,500 | 190,500 |
| Direct labor hours | 30,000 | 37,500 |
| Machine hours | 52,500 | 22,500 |
| Number of setups | 430 | 860 |
| Number of units produced | 15,000 | 7,500 |
Additional data: The 330,000 pounds of material were purchased for $544,500. One direct labor hours costs $12.
a. Assume that Odyssey Inc. uses direct labor hours to apply overhead to products. Determine the total cost for each product and the cost per unit.
Note: Round your final answers to two decimal places (i.e. round $4.355 to $4.36).
| Product A | Product B | |
|---|---|---|
| Total cost |
|
|
| Total cost per unit |
|
|
b. Assume that Odyssey Inc. uses machine hours to apply overhead to products. Determine the total cost for each product and the cost per unit.
Note: Round your final answers to two decimal places (i.e. round $4.355 to $4.36).
| Product A | Product B | |
|---|---|---|
| Total cost |
|
|
| Total cost per unit |
|
|
c. Assume that Odyssey Inc. uses the following activity centers, cost drivers, and costs to apply overhead to products:
| Cost Pool | Cost Driver | Cost |
|---|---|---|
| Utilities | # of machine hours | $750,000 |
| Setup | # of setups | 193,500 |
| Material handling | # of pounds of material | 1,419,000 |
Determine the total cost for each product and the cost per unit.
Note: Round your final answers to two decimal places (i.e. round $4.355 to $4.36).
| Product A | Product B | |
|---|---|---|
| Total cost |
|
|
| Total cost per unit |
|
|
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