QUESTION 10 Strama, Incorporated, manufactures and sells two products: Product A6 and Product 15. 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 A6 Product 15 Total $ 179,138 Labor-related DLHS Production orders orders Order size MHS 38,624 171,147 $388,909 7,000 300 4,400 1,600 8,600 500 800 4,500 8,900 The activity rate for the Order Size activity cost pool under activity-based costing is closest to: O $19.23 per MH
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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