Operating Dapartments Processing $875,000 Service Dapartments Total Cafeterla $ 210,000 2,000 Packaging $550,000 Custodlal $1,785,000 Departmental costs Space occupled in m2 Number of employees $150,000 500 10,000 8,000 20,500 12 165 135 317 Lirpa uses the step-down method for allocation. Costs are allocated from custodlal based on space occupled to cafeterla then to the operating departments. Cafeterla costs are allocated to the operating departments based on number of employees. Complete the service department allocations below. Note: not all blue cells must be filled in Department Allocation Basis as percentages: Custodial Administration Processing Bottling Custodial Administration Reallcoation of Costs: Custodial Administration Processing Bottling Total Custodial Costs Reallocation Total Administration Costs Reallocation Total
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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