Snavely, Inc., manufactures and sells two products: Product E1 and Product A7. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Expected Production Direct Labor-Hours Per Unit Total Direct Labor-Hours Product E1 1,100 10.0 11,000 Product A7 400 5.0 2,000 Total direct labor-hours 13,000 The direct labor rate is $20.60 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit Product E1 $211.00 Product A7 $287.00 The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Expected Activity Activity Cost Pools Activity Measures Overhead Cost Product E1 Product A7 Total Labor-related DLHs $ 139,700 11,000 2,000 13,000 Machine setups setups 65,880 1,200 400 1,600 Order size MHs 1,030,410 3,900 3,700 7,600 $ 1,235,990 The activity rate for the Order Size activity cost pool under activity-based costing is closest to:
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.
Snavely, Inc., manufactures and sells two products: Product E1 and Product A7. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:
| Expected Production | Direct Labor-Hours Per Unit | Total Direct Labor-Hours | |
| Product E1 | 1,100 | 10.0 | 11,000 |
| Product A7 | 400 | 5.0 | 2,000 |
| Total direct labor-hours | 13,000 | ||
The direct labor rate is $20.60 per DLH. The direct materials cost per unit for each product is given below:
| Direct Materials Cost per Unit |
|
| Product E1 | $211.00 |
| Product A7 | $287.00 |
The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
| Estimated | Expected Activity | |||||
| Activity Cost Pools | Activity Measures | Product E1 | Product A7 | Total | ||
| Labor-related | DLHs | $ | 139,700 | 11,000 | 2,000 | 13,000 |
| Machine setups | setups | 65,880 | 1,200 | 400 | 1,600 | |
| Order size | MHs | 1,030,410 | 3,900 | 3,700 | 7,600 | |
| $ | 1,235,990 | |||||
The activity rate for the Order Size activity cost pool under activity-based costing is closest to:
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