At the end of its current financial period, ChainSmokers Ltd reported a variable costing net profit of R100000. The company noted that it held opening stock of 5000 units, produced 40 000 units and had a closing stock at the end of the period of 3000 units. The variable cost per unit was R10 and did not change from the prior period. The absorption cost per unit was R12.5 in the prior period and R13 in the current period. Assuming that ChainSmokers Ltd uses the weighted average method, what is the absorption costing net profit for the current period (Rounded to the nearest Rand)? a. R103500 b. R98140 c. R96333 d. R103667 e. R101860
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.
At the end of its current financial period, ChainSmokers Ltd reported a variable costing net profit of R100000. The company noted that it held opening stock of 5000 units, produced 40 000 units and had a closing stock at the end of the period of 3000 units. The variable cost per unit was R10 and did not change from the prior period. The absorption cost per unit was R12.5 in the prior period and R13 in the current period. Assuming that ChainSmokers Ltd uses the weighted average method, what is the absorption costing net profit for the current period (Rounded to the nearest Rand)?
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