S Company produces custom widgets for its customers. The company uses an activity-based costing system for its overhead costs. One particular customer, Volley Inc., requested 40 jobs during the year for a total of 157 units, requiring a total of 193 machine hours. Each unit requires $0.47 in direct materials and $1.85 in direct labor. In accordance with ABC, $2009 of overhead was applied to Volley, Inc. The customer was charged $3791 for these jobs. Using ABC, compute the cost for S Corp. to produce one unit for Volley Inc. Round ONLY your final answer to 2 decimal places. Do not round intermediate calculations. Enter as a positive number.
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.
S Company produces custom widgets for its customers. The company uses an activity-based costing system for its
One particular customer, Volley Inc., requested 40 jobs during the year for a total of 157 units, requiring a total of 193 machine hours. Each unit requires $0.47 in direct materials and $1.85 in direct labor. In accordance with ABC, $2009 of overhead was applied to Volley, Inc. The customer was charged $3791 for these jobs.
Using ABC, compute the cost for S Corp. to produce one unit for Volley Inc. Round ONLY your final answer to 2 decimal places. Do not round intermediate calculations. Enter as a positive number.
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