Ubben Manufacturing uses an activity-based costing system. The company produces Model X and Model Y. Information relating to the two products is as follows: Model X Model Y Units produced 20,000 40,000 Machine hours 8,000 10,000 Direct labour hours 14,000 16,000 Engineering labour (hours) 1,000 1,400 Setups 40 60 The following costs are reported: Engineering £ 48,000 Setups 100,000 Machine-related overhead 144,000 Refer to Figure 11-1. Setups would be classified as a Group of answer choices unit-level activity. facility-level activity. batch-level activity. total-level activity.
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.
Figure 11-1
Ubben Manufacturing uses an activity-based costing system. The company produces Model X and Model Y. Information relating to the two products is as follows:
Model X Model Y
Units produced 20,000 40,000
Machine hours 8,000 10,000
Direct labour hours 14,000 16,000
Engineering labour (hours) 1,000 1,400
Setups 40 60
The following costs are reported:
Engineering £ 48,000
Setups 100,000
Machine-related
Refer to Figure 11-1. Setups would be classified as a
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