Olmo, Incorporated, manufactures and sells two products: Product K0 and Product H9. The annual production and sales of Product of K0 is 600 units and of Product H9 is 600 units. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Activity Cost Pools Activity Measures Estimated Overhead Cost Expected Activity Product K0 Product H9 Total Labor-related DLHs $ 550,908 3,600 1,800 5,400 Production orders orders 53,919 700 400 1,100 Order size MHs 836,516 4,000 3,100 7,100 $ 1,441,343 The overhead applied to each unit of Product H9 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)
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.
Olmo, Incorporated, manufactures and sells two products: Product K0 and Product H9. The annual production and sales of Product of K0 is 600 units and of Product H9 is 600 units. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
| Activity Cost Pools | Activity Measures | Estimated |
Expected Activity | ||
|---|---|---|---|---|---|
| Product K0 | Product H9 | Total | |||
| Labor-related | DLHs | $ 550,908 | 3,600 | 1,800 | 5,400 |
| Production orders | orders | 53,919 | 700 | 400 | 1,100 |
| Order size | MHs | 836,516 | 4,000 | 3,100 | 7,100 |
| $ 1,441,343 |
The overhead applied to each unit of Product H9 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)
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