Poll Board Inc. manufactures several models of high-quality skateboards. The company's ABC system has four activity cost pools, which are isted below along with their activity measures and activity rates: Activity cost Pool Supporting direct labour Activity Rate $ 8 per direct labour-hour $44 per batch $87 per order $92 per customer Activity Measure Number of direct labour-hours Batch processing Or der processing Customer service Number of batches Number of orders Number of customers The company Just completed a single order from SkateCofor 1,300 entry-level skateboards. The order was produced in 28 batches. Each skateboard requlred 1.7 direct labour-hours. The selling prce was $185 per skateboard, the direct materlals cost was $68.70 per skateboard, and the direct labour cost was $17.60 per direct labour-hour. This was the only order from SkateCofor the year. Required: Prepare a report showing the customer margin on sales to SkateCofor the year. Sales Costs: Direct materials Direct labour Supporting direct labour Batch processing Order processing Customer service overhead
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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