Activity Measure Activity Cost Pool Cleaning carpets Travel to jobs Job Support Square feet cleaned (ees) Miles driven Number of jobs Activity for the Year 9,eee hundred square feet 150,500 miles 1,900 jobs other (organization-sustaining costs and idle capacity costs) None Not applicable The total cost of operating the company for the year is $358,000 which includes the following costs: $ 148,000 32,000 16,000 27,000 Wages cleaning supplies Cleaning equipment depreciation vehicle expenses office expenses 56,000 President's compensation 79,000 Total cost $ 358,000 Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption Across Activities Cleaning Carpets 70% Wages Cleaning supplies Cleaning equipment depreciation Vehicle expenses office expenses President's compensation 100% 75% 0% e% 0% Travel to Jobs 15% 0% 0% 80% 0% 0% Job Support other 15% e% 0% 0% 0% 0% 64% 30% 25% 20% 36% 70% Total 100% 100% 100% 100% 100% 100%
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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