Product Infantry Special forces Machine Hours Setups 300 Receiving Orders Packing Orders 900 20,000 1,600 20,000 100 100 800 Costs $80,000 $24,000 $18,000 $30,000
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.
Product-Costing Accuracy, Consumption Ratios, Activity Rates, Activity
Costing
Tristar Manufacturing produces two types of battery-operated toy
soldiers: infantry and special forces. The soldiers are produced by using
one continuous process. Four activities have been identified: machining,
setups, receiving, and packing. Resource drivers have been used to
assign costs to each activity. The
other related data are as follows:
Required:
1. Calculate the total overhead assigned to each product by using
only machine hours to calculate a plantwide rate.
2. Calculate consumption ratios for each activity. (Round to two
decimal places.
3. Calculate a rate for each activity by using the associated driver.
(Round to two decimal places.
4. Assign the overhead costs to each product by using the activity
rates computed in Requirement 3.
5. CONCEPTUAL CONNECTION Comment on the difference
between the assignment in Requirement 1 and the activity-based
assignment.
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