ABC Company's usual production is 10,000 units. The company's relevant range of production is 7,500 to 12,500 unita When the company produces and sells 10,000 units, unit costs are as follows: Cost Per unit Total Direct Materials 600.00 Direct Labor 350.00 Variable manufacturing overhead Fixed manufacturing overhead Fixed Selling expenses Fixed administrative expenses Variable selling expenses Variable administrative expenses 150.00 4,000,000.00 3,000,000.00 2,000,000.00 400.00 300.00 200.00 100.00 50.00 Important note: Relevant range is a range where total fined costs, selling price per unit, and varlable cost per unit stays the same or does not change.
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.
| 4.) | If 8,000 units are sold, what is the total variable cost per unit sold? |
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