Skyline Florists uses an activity-based costing system to compute the cost of making floral bouquets and delivering the bouquets to its commercial customers. Company personnel who earn $170,000 typically perform both tasks; other firm-wide overhead is expected to total $80,000. These costs are allocated as follows:
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.
MC Qu. 5-49 Skyline Florists uses an activity-based...
Skyline Florists uses an activity-based costing system to compute the cost of making floral bouquets and delivering the bouquets to its commercial customers. Company personnel who earn $170,000 typically perform both tasks; other firm-wide overhead is expected to total $80,000. These costs are allocated as follows:
| Bouquet Production | Delivery | Other | |||||||||
| Wages and salaries | 60 | % | 30 | % | 10 | % | |||||
| Other overhead | 60 | % | 20 | % | 20 | % | |||||
Skyline anticipates making 20,000 bouquets and 3,000 deliveries in the upcoming year.
The cost of wages and salaries and other overhead that would be charged to each delivery is closest to:
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$22.33.
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$23.01.
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$29.45.
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$43.33.
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None of the answers is correct.
I got $7.50 and I am not sure if that is correct
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