Coronado Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100000 for the year. The following information is available regarding activity cost pools, cost drivers, total estimated overhead costs, and estimated use of activities per product: Activity Cost Pool Ordering and Receiving Machine Setup Machining Assembly Inspection Cost Driver Orders Setups Machine hours Parts Inspections Est. Overhead $ 60000 $0.60 per direct labor hour. $0.06 per part. $6880 per order. O $120 per order. 294500 1625500 1200000 260000 Cost Driver Activity 500 orders 450 setups 125000 MH 1000000 parts 500 inspections If overhead is applied using activity-based costing, the overhead application rate for ordering and receiving is
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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