1. DEF Company's average cost per unit is $1.425 at the 16,000 unit level of activity and $1.38 at the 20,000 unit level of activity. Assume that all of the activity levels mentioned in this problem are within the relevant range. Required: Predict the following items for DEF Company: a. Variable cost per unit. b. Total fixed cost per period. c. Total expected costs at the 18,000 unit level of activity. ----------------------------------------------------------------------------------- 2. TUV Inc., a manufacturing company, has provided the following financial data for September: Sales $590,000 Variable production expense $106,000 Variable selling expense $18,000 Variable administrative expense $78,000 Fixed production expense $145,000 Fixed selling expense $72,000 Fixed administrative expense $132,000 The company had no beginning or ending inventory. Required: a. Income statement in good form for September using the traditional approach. b. Income statement in good form for September using the contribution approach. c. For managerial accounting perspective, what approach is more useful and why?
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.
1. DEF Company's average cost per unit is $1.425 at the 16,000 unit level of activity and $1.38 at the 20,000 unit level of activity. Assume that all of the activity levels mentioned in this problem are within the relevant range.
Required:
Predict the following items for DEF Company:
a. Variable cost per unit.
b. Total fixed cost per period.
c. Total expected costs at the 18,000 unit level of activity.
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2. TUV Inc., a manufacturing company, has provided the following financial data for September:
Sales $590,000
Variable production expense $106,000
Variable selling expense $18,000
Variable administrative expense $78,000
Fixed production expense $145,000
Fixed selling expense $72,000
Fixed administrative expense $132,000
The company had no beginning or ending inventory.
Required:
a. Income statement in good form for September using the traditional approach.
b. Income statement in good form for September using the contribution approach.
c. For
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