Required information [The following information applies to the questions displayed below.] Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the company's five activity cost pools: Activity Cost Pool Labor-related Purchase orders Product testing Template etching General factory Required: 1. Compute the activity rate for each of the activity cost pools. Activity Cost Pool Labor-related Activity Measure Direct labor-hours Number of orders Number of tests Number of templates Machine-hours Purchase orders Product testing Template etching General factory Activity Rate per DLH per order per test per template per MH < Prev Expected Overhead Cost $ 18,000 $ 1,050 $ 3,500 $ 700 $ 50,000 5 of 5 Expected Activity 2,000 DLHS 525 orders 350 tests 28 templates 10,000 MHS www Next >
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.
![Required information
[The following information applies to the questions displayed below.]
Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management
made the following estimates of cost and activity in the company's five activity cost pools:
Activity Cost Pool
Labor-related
Purchase orders
Product testing
Template etching
General factory
Required:
1. Compute the activity rate for each of the activity cost pools.
Activity Cost Pool
Labor-related
Activity Measure
Direct labor-hours
Number of orders
Number of tests
Number of templates
Machine-hours
Purchase orders
Product testing
Template etching
General factory
Activity Rate
per DLH
per order
per test
per template
per MH
< Prev
Expected
Overhead
Cost
$ 18,000
$ 1,050
$ 3,500
$ 700
$ 50,000
5 of 5
Expected Activity
2,000 DLHS
525 orders
350 tests
28 templates
10,000 MHS
ww
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