Power Company manufactures a variety of drill bits. The company's plant is partially automated. The budget for the year includes $492,000 payroll for 5,800 direct labor-hours. Listed below is cost driver information used in the product-costing system: Overhead Cost Pool Budgeted Overhead Cost Driver Estimated Cost Driver Level Machine setups $ 464,950 Number of setups 170 setups Materials handling 107,400 Number of barrels 8,950 barrels Quality control 464,000 Number of inspections 1,600 inspections Other overhead cost 319,000 Number of machine hours 14,500 machine hours Total overhead $ 1,355,350 A current product order has the following requirements: Machine setups 14 setups Materials handling 636 barrels Quality inspections 83 inspections Machine hours 1,000 machine hours Direct labor hour 396 hours Using activity-based costing, how much quality control overhead is assigned to the order? Multiple Choice $130,186. $10,210. $11,608. $24,070. $46,433.
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.
Power Company manufactures a variety of drill bits. The company's plant is partially automated. The budget for the year includes $492,000 payroll for 5,800 direct labor-hours. Listed below is cost driver information used in the product-costing system:
| Budgeted Overhead | Cost Driver | Estimated Cost Driver Level | ||
|---|---|---|---|---|
| Machine setups | $ 464,950 | Number of setups | 170 | setups |
| Materials handling | 107,400 | Number of barrels | 8,950 | barrels |
| Quality control | 464,000 | Number of inspections | 1,600 | inspections |
| Other overhead cost | 319,000 | Number of machine hours | 14,500 | machine hours |
| Total overhead | $ 1,355,350 |
A current product order has the following requirements:
| Machine setups | 14 | setups |
|---|---|---|
| Materials handling | 636 | barrels |
| Quality inspections | 83 | inspections |
| Machine hours | 1,000 | machine hours |
| Direct labor hour | 396 | hours |
Using activity-based costing, how much quality control overhead is assigned to the order?
-
$130,186.
-
$10,210.
-
$11,608.
-
$24,070.
-
$46,433.
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