Metal Company budgeted $561,000 manufacturing direct wages, 2,200 direct labor hours, and had the following manufacturing overhead: Budgeted Level for Cost Driver 3,800 pounds 450 setups 30,600 machine hours. 220 inspections Budgeted Overhead Cost $ 114,000 13,500 1,530 13,200 Overhead Cost Pool Materials handling Machine setup Machine repair Inspections Requirements for Job #971 which manufactured 4 units of product Direct labor Direct materials Machine setup Machine hours Inspections 25 hours 190 pounds 50 setups 15,600 machine hours 20 inspections Using Activity-Based Costing, overhead cost assigned to Job #971 for machine setup is Overhead Cost Driver Weight of materials Number of setups Machine hours Number of inspections
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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