The Riverbed Brokerage firm is organized into two major sales divisions: institutional clients and retail clients. The firm also has two support departments: research and administration. The research department’s costs are allocated to the other departments based on a log of hours spent on tasks for each user. The administration department’s costs are allocated based on the number of employees in each department. Records are available for last period as follows: Support departments Operating departments Research Administration Institutional Retail Payroll costs $ 338,400 $ 289,700 $ 366,600 $ 585,200 Other costs $ 231,370 $ 163,800 $ 112,830 $ 238,870 Research hours 100 200 500 300 Number of employees 7 10 7 11
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.
Records are available for last period as follows:
Support departments Operating departments
Research Administration Institutional Retail
Payroll costs $ 338,400 $ 289,700 $ 366,600 $ 585,200
Other costs $ 231,370 $ 163,800 $ 112,830 $ 238,870
Research hours 100 200 500 300
Number of employees 7 10 7 11
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