PR 5-9 (LO 5.4) Sweet Hues Industries has adopted... Sweet Hues Industries has adopted a time-driven activity-based costing system. Its management estimates that an indirect cost rate of $1.50 per minute reasonably reflects the cost of company resources. Management has estimated the amount of time that each activity uses as follows: Activity Process order Packing and shipping Billing Rush order Driver Sales order Item shipped Sales order Rush order Estimated Minutes 5 3 2 60 Question a. Job 226 is a standard order that contains 93 items. What is the indirect cost allocation for Job 226? Note: Round your answer to 2 decimals. b. Job 227 is a standard order that contains 18 items. What is the indirect cost allocation for Job 227? Note: Round your answer to 2 decimals. c. Job 228 is a rush order that contains 2 items. What is the indirect cost allocation for Job 228? Note: Round your answer to 2 decimals. Answer
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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