*A common fixed cost that is allocated on the basis of sales pesos. Problem 2 (Eliminate or Retain a Product Line) Crystal Sports Equipment manufactures round, rectangular, and octagonal trampolines. Data on sales and expenses for the past month follow: Round P140,000 60,000 80,000 Trampoline Rectangular Octagonal P500,000 200,000 300,000 Sales. Less variable expenses. Contribution margin. Less fixed expenses: Advertising - traceable. . Depreciation of special equipment Line supervisors' salaries.. General factory overhead"... Total fixed expenses Net operating income (loss) P360,000 410,000 590,000 150,000 210,000 216,000 95,000 19,000 200,000 530,000 P 60.000 41,000 20,000 6,000 28,000 95,000 P(15.000) 110,000 40,000 7,000 100,000 257,000 P 43.000 65,000 35,000 6,000 72,000 178.000 P 32.000
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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