Average Cost per UnitDirect materials . . . . . . . . . . . . . . . . . . . . . . . . . $7.00Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4.00Variable manufacturing overhead . . . . . . . . . $1.50Fixed manufacturing overhead . . . . . . . . . . . $5.00Fixed selling expense . . . . . . . . . . . . . . . . . . . $3.50Fixed administrative expense . . . . . . . . . . . . . $2.50Sales commissions . . . . . . . . . . . . . . . . . . . . . . $1.00Variable administrative expense . . . . . . . . . . $0.50 Answer all questions independently.Required:1. For financial accounting purposes, what is the total amount of product costs incurred to make 20,000 units?2. For financial accounting purposes, what is the total amount of period costs incurred to sell 20,000 units?3. For financial accounting purposes, what is the total amount of product costs incurred to make 22,000 units?4. For financial accounting purposes, what is the total amount of period costs incurred to sell 18,000 units?
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.
Average Cost
per Unit
Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . $7.00
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4.00
Variable manufacturing overhead . . . . . . . . . $1.50
Fixed manufacturing overhead . . . . . . . . . . . $5.00
Fixed selling expense . . . . . . . . . . . . . . . . . . . $3.50
Fixed administrative expense . . . . . . . . . . . . . $2.50
Sales commissions . . . . . . . . . . . . . . . . . . . . . . $1.00
Variable administrative expense . . . . . . . . . . $0.50
Answer all questions independently.
Required:
1. For financial accounting purposes, what is the total amount of product costs incurred to make 20,000 units?
2. For financial accounting purposes, what is the total amount of period costs incurred to sell 20,000 units?
3. For financial accounting purposes, what is the total amount of product costs incurred to make 22,000 units?
4. For financial accounting purposes, what is the total amount of period costs incurred to sell 18,000 units?
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