Additional Information: a. Sales revenue per unit will be decreased by BD 1.200 fils for sales more than 9,000 units. b. Direct material cost is a variables cost and other production overheads are fixed cost. Direct labour consists of machine operatives' wages and the total wages behave as a step C. cost: Output Up to 7,500 units Over 7,501 and up to 11,000 units Over 11,001 and up to 15,000 units Machine running costs are a semi-variable cost. There is a fixed charge of BD 5,000 plus BD 1.200 fils per unit. Total Direct Labour cost BD 4,850 BD 8,563 BD 10,484 d. Required: the budgeted machine running costs under the output of 11300 unit are:
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.
![Budgeted Production Costs
Output
11,300 units
Costs
7,000 units
14,000 um
BD
BD
BD
Sales Revenue
44,100
82,200
Direct material
9.800
19,600
Machine running costs
13.400
21,800
Direct labour
4,850
10,484
Other production overheads
9,852
9,852
Total production costs
37.902
61,736
BD 13560
BD 5001.2
BD 18560
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