Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Setting up equipment $138,000 Ordering materials 21,600 Machining 107,100 Receiving 16,740 Silven produces two models of cell phones with the following expected activity demands: Model X 4,600 80 400 6,800 310 Units completed Number of setups Number of orders Machine hours Receiving hours Required: Model Y Activity Driver Activity Capacity Number of setups 120 Number of orders 1,200 Machine hours 11,900 Receiving hours 930 9,200 40 800 5,100 620 1. Determine the total overhead assigned to each product using the four activity drivers.
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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