please answer within the format by providing formula the detailed working Please provide answer in text (Without image) Please provide answer in text (Without image) Please provide answer in text (Without image) Churchill Products is considering updating its cost system to an activity-based costing system and is interested in understanding the effects. The company’s cost accountant has identified three overhead cost pools along with appropriate cost drivers for each pool. Cost Pools Costs Activity Drivers Utilities $ 315,000 63,000 machine-hours Scheduling and setup 300,000 600 setups Material handling 795,000 1,590,000 pounds of material The company manufactures three models of water basins (Oval, Round, and Square). The plans for production for the next year and the budgeted direct costs and activity by product line are as follows. Products Oval Round Square Total direct costs (material and labor) $ 80,000 $ 70,000 $ 80,000 Total machine-hours 35,000 8,000 20,000 Total number of setups 100 300 200 Total pounds of material 510,000 270,000 810,000 Total direct labor-hours 3,000 2,000 5,000 Number of units produced 4,200 2,200 5,500 Required: a. The current cost accounting system charges overhead to products based on direct labor-hours. What unit product costs will be reported for the three products if the current cost system continues to be used? b. What are the cost driver rates for the three cost pools identified by the cost accountant? c. What unit product costs will be reported for the three products if the ABC system suggested by the cost accountant's classification of cost pools is used?
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.
please answer within the format by providing formula the detailed working
Please provide answer in text (Without image)
Please provide answer in text (Without image)
Please provide answer in text (Without image)
Churchill Products is considering updating its cost system to an activity-based costing system and is interested in understanding the effects. The company’s cost accountant has identified three
| Cost Pools | Costs | Activity Drivers | |||
| Utilities | $ | 315,000 | 63,000 | machine-hours | |
| Scheduling and setup | 300,000 | 600 | setups | ||
| Material handling | 795,000 | 1,590,000 | pounds of material | ||
The company manufactures three models of water basins (Oval, Round, and Square). The plans for production for the next year and the budgeted direct costs and activity by product line are as follows.
| Products | |||||||||
| Oval | Round | Square | |||||||
| Total direct costs (material and labor) | $ | 80,000 | $ | 70,000 | $ | 80,000 | |||
| Total machine-hours | 35,000 | 8,000 | 20,000 | ||||||
| Total number of setups | 100 | 300 | 200 | ||||||
| Total pounds of material | 510,000 | 270,000 | 810,000 | ||||||
| Total direct labor-hours | 3,000 | 2,000 | 5,000 | ||||||
| Number of units produced | 4,200 | 2,200 | 5,500 | ||||||
Required:
a. The current cost accounting system charges overhead to products based on direct labor-hours. What unit product costs will be reported for the three products if the current cost system continues to be used?
b. What are the cost driver rates for the three cost pools identified by the cost accountant?
c. What unit product costs will be reported for the three products if the ABC system suggested by the cost accountant's classification of cost pools is used?
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