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. Activity Cost Activity Base Procurement $309,800 Number of purchase orders Scheduling 207,900 Number of production orders Materials handling 427,200 Number of moves Product development 787,800 Number of engineering changes Production 1,508,300 Machine hours Number ofPurchaseOrders Number ofProductionOrders NumberofMoves Number ofEngineeringChanges MachineHours NumberofUnits Disk drives 3,930 330 1,340 11 1,800 1,800 Tape drives 2,400 165 710 4 8,100 3,600 Wire drives 13,000 700 4,400 20 10,400 2,100 The activity-based cost for each disk drive unit is a.$878.32 b.$16.03 c.$328.05 d.$223.91
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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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.
Activity Cost
Activity BaseProcurement $309,800 Number of purchase orders Scheduling 207,900 Number of production orders Materials handling 427,200 Number of moves Product development 787,800 Number of engineering changes Production 1,508,300 Machine hours
Number of
Purchase
Orders
Number of
Production
Orders
Number
of
Moves
Number of
Engineering
Changes
Machine
Hours
Number
of
UnitsDisk drives 3,930 330 1,340 11 1,800 1,800 Tape drives 2,400 165 710 4 8,100 3,600 Wire drives 13,000 700 4,400 20 10,400 2,100 The activity-based cost for each disk drive unit is
a.$878.32b.$16.03c.$328.05d.$223.91
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