A company has three divisions (D1, D2 and D3) to which the following budgeted information relates: Division D1 (R’000) Division D2 (R’000) Division D3 (R’000) Contribution 150 85 125 Less: Fixed costs 80 100 95 Profit/Loss 70 -15 30 60 percent of each divisions fixed costs are general company overheads. The other fixed costs are specific to each division and are avoidable if the division closes down. If Division D2 is closed down and the sales of the other two divisions remained unchanged, what would the revised budgeted profit of the company be? a. R100000 b. R0 c. R109000 d. R40000 e. R60000
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.
A company has three divisions (D1, D2 and D3) to which the following budgeted information relates:
|
|
Division D1 (R’000) |
Division D2 (R’000) |
Division D3 (R’000) |
|
Contribution |
150 |
85 |
125 |
|
Less: Fixed costs |
80 |
100 |
95 |
|
|
70 |
-15 |
30 |
60 percent of each divisions fixed costs are general company
Step by step
Solved in 3 steps
