Vaughn Company manufactures two products, Board 12 and case 165. Vaughn's overhead costs consist of setting up machines, $2720000; machining, $5700000; and inspecting. $1500000, Information on the two products and their estimated use of cost drivers is as follows: Direct labor hours Machine setups Machine hours Inspections O $6200000 O $3968000 Board 12 Case 165 25000 400 26000 O $4480000. O $4752000. 15000 600 24000 800 Overhead assigned to Case 165 using activity-based costing is 700
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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