Cost BehaviorSmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that its total annual overhead costs can be represented by the following formula: Over-head cost = $543,000 + $1.34X, where X equals number of smokers. Last year, SmokeCity pro-duced 20,000 smokers. Actual overhead costs for the year were as expected. Required:1. What is the driver for the overhead activity?2. What is the total overhead cost incurred by SmokeCity last year?3. What is the total fixed overhead cost incurred by SmokeCity last year?4. What is the total variable overhead cost incurred by SmokeCity last year?5. What is the overhead cost per unit produced?6. What is the fixed overhead cost per unit?7. What is the variable overhead cost per unit?8. Recalculate Requirements 5, 6, and 7 for the following levels of production: (a) 19,500 unitsand (b) 21,600 units. (Round your answers to the nearest cent.) Explain this outcome.
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.
Cost Behavior
SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has
found that its total annual
head cost = $543,000 + $1.34X, where X equals number of smokers. Last year, SmokeCity pro-
duced 20,000 smokers. Actual overhead costs for the year were as expected.
Required:
1. What is the driver for the overhead activity?
2. What is the total overhead cost incurred by SmokeCity last year?
3. What is the total fixed overhead cost incurred by SmokeCity last year?
4. What is the total variable overhead cost incurred by SmokeCity last year?
5. What is the overhead cost per unit produced?
6. What is the fixed overhead cost per unit?
7. What is the variable overhead cost per unit?
8. Recalculate Requirements 5, 6, and 7 for the following levels of production: (a) 19,500 units
and (b) 21,600 units. (Round your answers to the nearest cent.) Explain this outcome.
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