CABBAGE Company makes three products with the following characteristics: Product Product Product V JK JIN Selling price per unit P10 P15 P20 Variable Cost per unit P6 P10 P10 Machine hours per unit 2 4 10 The company has a capacity of 2,000 machine hours, but there is virtually limited demand for product V of 350 units and product JIN of 560 units. In order to maximize total contribution margin, how many units of each product should the company product for product JK?
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.
CABBAGE Company makes three products with the following characteristics:
|
|
Product |
Product |
Product |
|
|
V |
JK |
JIN |
|
Selling price per unit |
P10 |
P15 |
P20 |
|
Variable Cost per unit |
P6 |
P10 |
P10 |
|
Machine hours per unit |
2 |
4 |
10 |
The company has a capacity of 2,000 machine hours, but there is virtually limited demand for product V of 350 units and product JIN of 560 units. In order to maximize total contribution margin, how many units of each product should the company product for product JK?
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