Brandon Machines manufactures a number of products from the same raw material. Joint processing costs total $10,000. Product A could be sold at the cut-off point for $18,000 or it can be further processed at a cost of $9,000 and then sold for $35,000. Brandon should: Further process product A because its incremental revenues will exceed incremental costs by $8,000. Further process product A because its incremental revenues will exceed incremental costs by $26,000. Sell as-is because the incremental loss is $2,000 if processed further. Further process product A because its incremental revenues will exceed incremental costs by $16,000. Further process because the incremental revenues will be $35,000.
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.
Brandon Machines manufactures a number of products from the same raw material. Joint
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Further process product A because its incremental revenues will exceed incremental costs by $8,000. |
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Further process product A because its incremental revenues will exceed incremental costs by $26,000. |
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Sell as-is because the incremental loss is $2,000 if processed further. |
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Further process product A because its incremental revenues will exceed incremental costs by $16,000. |
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Further process because the incremental revenues will be $35,000. |
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