XYZ's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $280,000 are allocated based on budgeted warehouse-hours. Data Center Department costs of $80,000 are allocated based on the number of computer log-on hours. The costs of operating departments Music and Books are $90,000 and $108,000, respectively. Data on budgeted warehouse-hours and number of computer log-on hours are as follows: Budgeted costs Budgeted warehouse-hours O $122,500 Production Departments O $126,000 Number of computer hours 400 O $98,000 Warehouse Department O $98,000 $280,000 ΝΑ Data Center Department $80,000 500 ΝΑ Support Departments Music $90,000 1,125 900 Books Using the direct method, what amount of Warehouse Department costs will be allocated to Department Books? (Do not round any intermediary calculations.) $108,000 875 700
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.
Step by step
Solved in 3 steps