The controller of D-Day Chemical Supply has established the following activity centers with overhead costs and related cost drivers: Budgeted Overhead Costs Budgeted Level for Cost Drivers Activity Centers Cost Drivers Materials Handling Machine setups Hazardous waste Weight of raw materials 60,000 pounds Number of setups Weight of hazardous Materials Number of inspections Machine Hours P120,000 120 setups 12,000 pounds 240,000 60,000 Quality Control Others 1,000 inspections 102,500 hours 85,000 205,000 An order for 1,000 boxes of powdered chemicals has the following production requirements: Raw materials (in pounds) Machine setups Hazardous materials (in pounds) Inspections Machine hours 12,500 25 2,500 30 520
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.
Using ABC, the total
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