Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be trace activity base data by product are as follows: Procurement Scheduling Materials handling Product development Production Activity Cost $370,000 250,000 500,000 730,000 1,500,000 Disk drives Tape drives Wire drives Number of Number Number of Production of Engineering Orders Moves Changes 300 1,400 10 150 800 10 800 4,000 25 The activity-based cost (rounded to the nearest cent) for each wire drive unit is Oa. $394.12 Ob. $173.51 Oc. $744.06 Number of Purchase Orders Activity Base Number of purchase orders Number of production orders Number of moves Number of engineering changes Machine hours 4,000 4,000 12,000 Machine Hours 2,000 8,000 10,000 Number of Units 2,000 4,000 2,500
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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