Manoli Company has collected the following data for use in calculating product costs: Activity Data (expected and actual): Rug Cleaners Sweepers Total Units produced 50,000 250,000 300,000 Prime costs $200,000 $750,000 $950,000 Direct labor hours 10,000 40,000 50,000 Machine hours 20,000 10,000 30,000 Number of setups 25 75 100 Inspection hours 1,200 2,800 4,000 Number of moves 140 210 350 Departmental Data (expected and actual): Molding Assembly Total Direct labor hours: Rug cleaners 5,000 5,000 10,000 Sweepers 5,000 35,000 40,000 Totals 10,000 40,000 50,000 Machine hours: Rug cleaners 17,000 3,000 20,000 Sweepers 3,000 7,000 10,000 Totals 20,000 10,000 30,000 Overhead costs: Machining $120,000 $ 30,000 $150,000 Moving materials 40,000 30,000 70,000 Setting up 70,000 10,000 80,000 Inspecting products 20,000 30,000 50,000 Totals $250,000 $100,000 $350,000 What is the activity rate for moving materials? a. 0.2 b. $800 c. $1,000 d. $200
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.
Manoli Company has collected the following data for use in calculating product costs:
Activity Data (expected and actual):
Rug Cleaners
Sweepers
Total
Units produced
50,000
250,000
300,000
Prime costs
$200,000
$750,000
$950,000
Direct labor hours
10,000
40,000
50,000
Machine hours
20,000
10,000
30,000
Number of setups
25
75
100
Inspection hours
1,200
2,800
4,000
Number of moves
140
210
350
Departmental Data (expected and actual):
Molding
Assembly
Total
Direct labor hours:
Rug cleaners
5,000
5,000
10,000
Sweepers
5,000
35,000
40,000
Totals
10,000
40,000
50,000
Machine hours:
Rug cleaners
17,000
3,000
20,000
Sweepers
3,000
7,000
10,000
Totals
20,000
10,000
30,000
Overhead costs:
Machining
$120,000
$ 30,000
$150,000
Moving materials
40,000
30,000
70,000
Setting up
70,000
10,000
80,000
Inspecting products
20,000
30,000
50,000
Totals
$250,000
$100,000
$350,000
What is the activity rate for moving materials?
a. 0.2
b. $800
c. $1,000
d. $200
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