Torello Corporation manufactures two products: Product H95V and Product V93N. The company uses a plantwide overhead rate based on direct labor- hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products H95V and V93N Activity Cost Pool Activity Measure Machining Machine setups Product design Order size Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Machine-hours Number of setups Number of products Direct labor-hours Product Product H95V V93N 6,000 5,000 250 100 1 4,000 1 6,000 What is the company's plantwide overhead rate? Total Cost $ 242,000 $ 140,000 $ 70,000 $ 270,000 Total Activity 11,000 MHS 350 setups 2 products 10,000 DLHS
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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Torello Corporation manufactures two products: Product H95V and Product V93N. The company uses a plantwide overhead rate based on direct labor-
hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The
following additional information is available for the company as a whole and for Products H95V and V93N
Activity Cost Pool
Machining
Machine setups
Product design
Order size
Activity Measure
Machine-hours
Number of setups
Number of products
Direct labor-hours i
Activity Measure
Machine-hours
Number of setups
Number of products
Direct labor-hours.
Multiple Choice
Product Product
H95V
V93N
6,000
5,000
250
100
1
1
6,000
4,000
What is the company's plantwide overhead rate?
$180 50 per direct labor-hour
Total Cost
$ 242,000
$ 140,000
$ 70,000
$ 270,000
Total Activity
11,000 MHS
350 setups
2 products
10,000 DLHS](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F506c3f2a-e371-4ce1-aa8d-cf5301d8204a%2F8a64a8fa-4d01-47eb-a3b9-c433f25288cc%2Fybur2bd_processed.jpeg&w=3840&q=75)
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