A company uses activity-based costing. The company makes two products: A and B. The annual production and sales of A is 400 units at $70 per unit and of B is 200 units at $90 per unit. Direct period costs are $3,000 for each product. There are three activity cost pools, with total allocated cost are as follows: Activity Cost Pools A B Total Cost Activity 1 Activity 2 $4,280 $2,380 $6,660 1,275 7.175 8,450 Activity 3 2,654 6,877 9,531 If the total of direct materials and direct labor costs for Product A is $20,000, the product margin for Product A is: (Enter a number in the box, use a negative sign for a product margin loss) $
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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