Singh and Danzin is an architectural firm that provides services for residential construction projects. The following overhead cost data are from the current period. Budgeted Costs Budgeted Activity Usage contact hours design hours Activity Client consultation $ 292,500 1,500 Drawings 130,000 2,000 1. Compute an activity rate for each activity using activity-based costing. 2. Allocate overhead cost to a job that requires 60 contact hours and 355 design hours. 1. Compute an activity rate for each activity using activity-based costing. (Round "Activity rate" to 2 decimal places.) Activity Budgeted Cost Budgeted Activity Usage Activity Rate Client consultation Drawings 2. Allocate overhead cost to a job that requires 60 contact hours and 355 design hours. (Round "Activity Rate" to 2 decimal places and other answers to the nearest whole dollar amount.) Activity Activity Usage Activity Rate Allocated Cost Client consultation Drawings
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.
Lets understand the basics.
In activity based costing, activity rate is calculated by the dividing budgeted costs with the budgeted activity usage.
Activity rate = Budgeted costs/Budgeted activity usage
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