Chapter 8 Accounting for Factory Overhead 253 Hackers Corp. accumulated the following information for its two products, A and B. Product A Product B Total Production volume Total direct labor hours 2,000 5,000 P 1,000 100 1,000 20,000 P 2,000 50 25,000 Setup cost per batch Batch size Total set-up cost incurred Direct labor hour-per unit A traditional costing system would allocate set-up costs on the basis of direct labor hours. An ABC system would trace costs by spreading the cost per batch over the units in a batch. P20,000 P40,000 P60,000 1 19. What is the set-up cost per unit.of Product A under each costing system? Traditional ABC System a.. P4.80 P10.00 b. 2.40 10.00 с. 40:00 200.00 d. 4.80 20.00
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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