Activity-Based Costing: Factory Overhead Costs The total factory overhead for Bardot Marine Company is budgeted for the year at $1,207,500, divided into four activities: fabrication, $595,000; assembly, $266,000; setup, $189,000; and inspection, $157,500. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows: Assembly Setup Inspection 28,500 dlh 9,500 38,000 dlh Speedboat Bass boat 63 setups 462 525 setups Each product is budgeted for 7,500 units of production for the year. a. Determine the activity rates for each activity. 17 per direct labor hour $ 7 per direct labor hour $ 360 per setup $ 180 per inspection b. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar. per unit per unit Fabrication Assembly Setup Inspection Fabrication 8,750 dlh 26,250 35,000 dih Speedboat Bass boat 109 inspections 766 875 inspections
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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