Visual Manufacturing produces two types of cameras: 35mm and digital. The cameras are produced using one continuous process. Four activities involved in the production have been identified as: machining, setups, receiving, and packing. Resource drivers have been used to assign costs to each activity. The overhead activities, their costs, and the other related data are as follows: Product Machine Hours Setups Receiving Orders Packing Orders 35mm 10,000 100 200 800 Digital 10,000 250 800 4,000 Costs $240,000 $160,000 $32,000 $96,000 Calculate an activity rate for packing based on packing orders. a.$24.00 per packing order b.$18.00 per packing order c.$2.00 per packing order d.$120.00 per packing order e.$20 per packing order
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.
| Product | Machine Hours | Setups | Receiving Orders | Packing Orders |
| 35mm | 10,000 | 100 | 200 | 800 |
| Digital | 10,000 | 250 | 800 | 4,000 |
| Costs | $240,000 | $160,000 | $32,000 | $96,000 |
Calculate an activity rate for packing based on packing orders.
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