Cane Company manufactures two products called Alpha and Beta that sell for $240 and $162, respectively. Each prod uses only one type of raw materlal that costs $5 per pound. The company has the capacity to annually produce 131,00 units of each product. Its average cost per unit for each product at this level of activity are glven below: Beta Alpha $ 35 48 $ 15 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses 23 27 25 35 38 32 28 35 30 Total cost per unit S 212 $ 159 The company considers its traceable fixed manufacturing overhead to be avoldable, whereas Iits common fixed expen: are unavoldable and have been allocated to products based on sales dollars. dational 13-5 (Algo) ume that Cane expects to produce and sell 115,000 Alphas during the current year. One of Cane's sales representative a new customer who Is willing to buy 30,000 additional Alphas for a price of $160 per unit; however pursuing this opp crease Alpha sales to regular customers by 14,000 units. t is the financial advantage (disadvantagel of accenting the new customer's ordier?
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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