Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below. Procurement Scheduling Materials handling Product development Production Activity Cost Activity Base $365,600 Number of purchase orders 245,100 Number of production orders 411,700 Number of moves 716,200 Number of engineering changes 1,470,000 Machine hours Number of Purchase Orders Number of Number Number of Production of Orders Moves Disk drives 4,090 1,310 Tape drives 2,100 620 Wire drives 11,600 4,200 The activity rate for the scheduling activity cost pool is Oa. $20.55 per production order Ob. $61.00 per production order Oc. $238.18 per production order Od. $159.67 per production order 370 175 990 Engineering Changes 10 7 27 Machine Hours 2,500 9,600 12,000 Number of Units 2,200 3,800 2,700
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.
![Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be
traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below.
Procurement
Scheduling
Materials handling
Product development
Production
Activity Cost
Activity Base
$365,600
Number of purchase orders
245,100 Number of production orders
411,700
Number of moves
716,200
Number of engineering changes
1,470,000 Machine hours
Disk drives
Tape drives
Wire drives
Number of Number of Number Number of
Production
of
Engineering
Orders
Moves
Changes
Purchase
Orders
1,310
620
4,200
The activity rate for the scheduling activity cost pool is
Oa. $20.55 per production order
Ob. $61.00 per production order
Oc. $238.18 per production order
Od. $159.67 per production order
4,090
2,100
11,600
370
175
990
10
7
27
Machine
Hours
2,500
9,600
12,000
Number
of
Units
2,200
3,800
2,700
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