Nole, Incorporated, manufactures and sells two products: Product W8 and Product NO. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Total Direct Labor-Hours 900 11,000 11,900 The direct labor rate is $17.40 per DLH. The direct materials cost per unit for each product is given below: Product W8 Product NO Total direct labor-hours Product W8 Product NO Direct Materials Cost per Unit $ 176.40 $ 280.50 Expected Production 100 1,000 Activity Cost Pools Labor-related Machine setups Order size The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Activity Product NO 11,000 400 4,200 Activity Measures Direct Labor- Hours Per Unit 9.0 11.0 DLHS setups MHS Expect Product W8 900 300 4,000 Hurhans and Animals Parallels Save & Exit Submit Help Estimated Overhead Cost $461,720 25,865 796,220 $ 1,283,805 The overhead applied to each unit of Product W8 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.) Total 11,900 700 8,200
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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