The controller of D-Day Chemical Supply has established the following activity centers with overhead costs and related cost drivers: Budgeted Overhead Costs Budgeted Level for Cost Drivers Activity Centers Cost Drivers Materials Handling Machine setups Hazardous waste Weight of raw materials 60,000 pounds Number of setups Weight of hazardous Materials Number of inspections Machine Hours P120,000 120 setups 12,000 pounds 240,000 60,000 Quality Control Others 1,000 inspections 102,500 hours 85,000 205,000 An order for 1,000 boxes of powdered chemicals has the following production requirements: Raw materials (in pounds) Machine setups Hazardous materials (in pounds) Inspections Machine hours 12,500 25 2,500 30 520
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.
Using ABC, the total overhead costs charged to the 1,000 boxes of powdered chemical is:
![The controller of D-Day Chemical Supply has established the following activity centers with overhead costs and
related cost drivers:
Activity Centers
Budgeted Overhead
Costs
P120,000
240,000
60,000
Cost Drivers
Budgeted Level for Cost
Drivers
Materials Handling
Machine setups
Weight of raw materials 60,000 pounds
Number of setups
Weight of hazardous
Materials
Number of inspections
Machine Hours
120 setups
12,000 pounds
Hazardous waste
Quality Control
Others
85,000
205,000
1,000 inspections
102,500 hours
An order for 1,000 boxes of powdered chemicals has the following production requirements:
Raw materials (in pounds)
Machine setups
Hazardous materials (in pounds)
Inspections
Machine hours
12,500
25
2,500
30
520](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F106f70da-a18f-4095-8484-743bca3c4e70%2Fb838d762-154b-48b0-8fb8-3d6199e2ef15%2Fyg91ef_processed.png&w=3840&q=75)
![](/static/compass_v2/shared-icons/check-mark.png)
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
![Cornerstones of Cost Management (Cornerstones Ser…](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
![Managerial Accounting: The Cornerstone of Busines…](https://www.bartleby.com/isbn_cover_images/9781337115773/9781337115773_smallCoverImage.gif)
![Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
![Cornerstones of Cost Management (Cornerstones Ser…](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
![Managerial Accounting: The Cornerstone of Busines…](https://www.bartleby.com/isbn_cover_images/9781337115773/9781337115773_smallCoverImage.gif)
![Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
![Financial And Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337902663/9781337902663_smallCoverImage.jpg)
![Principles of Cost Accounting](https://www.bartleby.com/isbn_cover_images/9781305087408/9781305087408_smallCoverImage.gif)