Marmor Manufacturing has five activity cost pools and two products (a unicorn candy and a sparkling gum). Information is presented below: Cost Drivers by Product Activity Cost Pool Cost Driver Est. Overhead Unicorn Candy Sparkling Gum Ordering and Receiving Orders $ 230,000 500 650 Machine Setup Setups 194,000 250 300 Machining Machine hours 1,250,000 250,000 120,000 Assembly Parts 840,000 1,180,000. 750,000 Inspection Inspections 110,000 726 550 Instructions Compute the overhead cost per unit for each product. Production is 125,000 units of Unicorn Candy and 240,000 units of Sparkling Gum. Round your answer to the nearest cent.
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.
Problem 2
Marmor Manufacturing has five activity cost pools and two products (a unicorn candy and a sparkling gum). Information is presented below:
|
|
Cost Drivers by Product |
|
Activity Cost Pool |
Cost Driver Est. Overhead Unicorn Candy Sparkling Gum |
|
Ordering and Receiving |
Orders $ 230,000 500 650 |
|
Machine Setup |
Setups 194,000 250 300 |
|
Machining |
Machine hours 1,250,000 250,000 120,000 |
|
Assembly |
Parts 840,000 1,180,000. 750,000 |
|
Inspection |
Inspections 110,000 726 550 |
Instructions
Compute the overhead cost per unit for each product. Production is 125,000 units of Unicorn
Candy and 240,000 units of Sparkling Gum. Round your answer to the nearest cent.
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