Puget World, Incorporated, manufactures two models of television sets, the N 800 XL model and the N 500 model. Data regarding the two products follow: Model N 800 XL Model N 500 Activity Cost Pool Machine setups Special processing General factory Direct Labor- Hours per Unit 3.0 1.0 Activity Measure Number of setups Machine-hours Direct labor-hours Annual Production 4,000 units 13,000 units Additional information about the company follows: a. Model N 800 XL requires $70 in direct materials per unit, and Model N 500 requires $30. b. The direct labor wage rate is $17 per hour. c. The company has always used direct labor-hours as the base for applying manufacturing overhead cost to products. d. Model N 800 XL is more complex to manufacture than Model N 500 and requires the use of special equipment. Consequently, the company is considering the use of activity-based costing to assign manufacturing overhead cost to products. Three activity cost pools have been identified as follows: Activity Measure Number of setups Machine-hours Direct labor-hours Model N 800 XL 150 Total Direct Labor-Hours 20,000 12,000 12,000 13,000 25,000 Estimated. Overhead Cost $ 520,000 235,000 1,445,000 $ 2,200,000 Expected Activity Model N 500 250 0 13,000 Total 400 20,000 25,000

Q: Explain unit product cost under variable costing.

A: Variable Costing: “Variable costing is a method that allocates only variable manufacturing costs to…

Q: Distinguish between Period cost and Product cost? Give two examples of each cos

A: Classification of costs on the basis of functions:- 1. Product Cost 2. Period Cost

Q: ost flow methods and assumptions. What

A: The different cost flow methods and assumptions are as follows: FIFO LIFO Weighted average

Q: How is the predetermined overhead allocation rate determined?

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Q: how do I find direct cost per unit

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A: The objective of this question is to understand the concepts of fixed and variable costs within a…

Q: Formula for FIxed Overhead How do you find fixed overhead?  What is the formula?

A: Overheads refers to the total cost of indirect materials, indirect labour and indirect expenses.…

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Q: What is a component cost?

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Q: What is normal costing?

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Q: Explain variable overhead costs.

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Q: How do you get total of period cost?

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A: The objective of the question is to identify the overhead allocation methods that result in the use…

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.