Required information [The following information applies to the questions displayed below.] Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the company's five activity cost pools: Activity Cost Pool Labor-related Purchase orders. Product testing Template etching General factory Activity Measure Direct labor-hours Number of orders Number of tests Number of templates Machine-hours Expected Overhead Cost $ 30,115 $ 2,320 $ 6,930 $ 870 $ 65,100 Expected Activity 1,585 DLHS 580 orders 330 tests 30 templates 9,300 MHS
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.
![Required information
[The following information applies to the questions displayed below.]
Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made
the following estimates of cost and activity in the company's five activity cost pools:
Activity Cost Pool
Labor-related
Purchase orders
Product testing
Template etching
General factory
Activity Cost Pool
Labor-related (DLHS)
Activity Measure
Product A
Product B
Product C
Product D
Direct labor-hours
Number of orders
Number of tests
Number of templates
Machine-hours
Total Overhead
Cost
Expected
Overhead
Cost
$ 30,115
$ 2,320
$ 6,930
$ 870
$ 65,100
2. The expected activity for the year was distributed among the company's four products as follows:
Product A
625
30
190
Expected Activity
1,585 DLHS
Product B
160
Purchase orders (orders)
190
Product testing (tests)
55
Template etching (templates)
17
3
General factory (MHS)
3,600
1,700
2,300
Using the ABC data, determine the total amount of overhead cost assigned to each product.
Expected Activity
Product C
580 orders
330 tests
30 templates
400
170
9,300 MHs
10
1,700
Product D
400
190
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