Best Homes Ltd. has 100 lots on which to build new houses. Two styles of houses are to be built, Model A and Model B. Better Homes wants to build these houses over the next nine months. During this time, Better Homes will have available 12 000 man-hours of carpentry labour and 13 000 man-hours of mason labour. Each Model A house requires 200 man-hours of carpentry labour and 50 man-hours of mason labour. Each Model B house requires 100 man-hours of carpentry labour and 120 man-hours of mason labour. The profit contribution of a Model A house is projected to be $5,100, while that of a Model B house is projected at $5,000. Better Homes wants to know how many houses of each type to build so as to maximize profit. Formulate this as a linear programming problem.
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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