Fabrication Assembly Setup Inspection Speedboat 15,750 dlh 5,250 5,750 dlh 41 setups 72 inspections Bass boat 304 17,250 503 23,000 dlh 21,000 dlh 345 setups 575 inspections Each product is budgeted for 4,500 units of production for the year.
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.
Activity-Based
The total factory overhead for Bardot Marine Company is budgeted for the year at $800,200, divided into four activities: fabrication, $391,000; assembly, $147,000; setup, $141,450; and inspection, $120,750. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows: Image
Each product is budgeted for 4,500 units of production for the year.
a. Determine the activity rates for each activity.
| Fabrication | $ per direct labor hour |
| Assembly | $ per direct labor hour |
| Setup | $ per setup |
| Inspection | $ per inspection |
b. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar.
| Speedboat | $ per unit |
| Bass boat | $ per unit |
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