Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to five separate activity pools. The budgeted activity cost and activity base data by product are as follows: Procurement Scheduling Materials handling Product development Production Disk drives Tape drives Wire drives Activity Cost Activity Base $379,200 Number of purchase orders 245,800 Number of production orders 402,900 Number of moves 728,700 Number of engineering changes 1,528,900 Machine hours $149 42 Number of Purchase Orders 3,890 1,700 13,000 Number of Number of Moves Production Orders 280 155 870 1,330 500 3,600 The activity rate (rounded to the nearest cent) for the production cost pool is O a. $74.2 per machine hour b. $74.22 per machine hour thing haun Number of Engineering Changes 13 3 Machine Hours 20 1,500 8,400 10,700 Number of Units 2,100 3,900 3,000
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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