Pan & Smith LLP, a consulting firm, uses an activity-based costing in which there are three activity cost pools. The company has provided the following data concerning its costs and its activity-based costing system: Costs: Wages and Salaries Travel Expenses Other Expenses Total $540,000 $100,000 $140,000 $780,000 Distribution of Resource Consumption: Activity Cost Pools Working On Business Engagements Development Other Total 100% Wages and salaries 50% Travel expenses Other expenses 20% 30% 10% 60% 30% 100% 100% 35% 25% 40% a. How much cost, in total, would be allocated to the "Working on Engagements" activity cost pool? p. How much cost, in total, would be allocated to the "Business Development" activity cost pool? c. How much cost, in total, would be allocated to the "Other" activity cost pool?
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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