Assume that the Oslo Ice Cream Company is considering the costs of two of their product lines-ice cream sandwiches and popsicles. The company identified the following partial list of activities, costs, and activity drivers expected for the next year: Activity. Mixing costs Packaging costs Expected Costs $750,000 $ 18,000 Number of batches made Cost Driver Number units made Production volume Batches made Ice Cream Sandwiches 300,000 Sandwiches 400 batches Popsicles 200,000 popsicles 500 batches How much overhead cost will be assigned to the Ice Cream Sandwich product line using activity- based costing (ABC)?
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.
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