b) According to the factory Job Cost Ledger job number 84 has incurred the following prime cost. Materials (direct) 30 kg at £6 per kg. Wages (direct) Dept. A Dept B 32 hours at £1.50 per hour Budgeted overheads for the year based on normal capacity are as follows: Variable Overheads: Dept. A £4500 for 9000 direct labour hours £12500 for 10000 direct labour hours 18 hours at £1.75 per hour Dept. B Fixed overheads: Total budgeted direct labour hours for both factories 22000 Total budgeted expenditure £28600 Required: a) Calculate the cost of Job number 84. Estimate the percentage of profits obtained if the price to the customer was £500
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.
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