2) Teecorp Company provides the following ABC costing information: Activities Labor Total Costs $320,000 Gas $36,000 $40.000 $396.000 Invoices Total costs Activity-cost drivers 8,000 hours 6,000 gallons 2,500 invoices The above activities used by their three departments are: Lawn Department 2,500 hours 1,700 gallons 1,600 invoices Labor Gas Invoices Bush Department 1,200 hours 800 gallons 400 invoices Plowing Department 4,300 hours 3,500 gallons 500 invoices a. How much of the labor cost will be assigned to the Bush Department? b. If labor hours are used to allocate the non-labor, overhead costs, what is the overhead allocation rate? c. How much of invoice cost will be assigned to the Bush Department? d. How much of the gas cost will be assigned to the Lawn Department? e. How much of the total cost will be assigned to the Plowing Department?
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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