Chem Manufacturing Company processes direct materials up to the split-off point where two products (X and Y) are obtained and sold. The following information was collected for the month of November: Direct materials processed: 10,200 gallons (10,200 gallons yield 9,500 gallons of good product and 700 gallons of shrinkage) Production: X 5,300 gallons Y 4,200 gallons Sales: X 5,050 at $300 per gallon Y 3,950 at $80 per gallon The cost of purchasing 10,200 gallons of direct materials and processing it up to the split-off point to yield a total of 9,500 gallons of good products was $1,050,000. The beginning inventories totaled 35 gallons for X and 400 gallons for Y. Ending inventory amounts reflected 565 gallons of Product X and 1,515,000 gallons of Product Y. October costs per unit were the same as November. Using the physical-volume method, what is Product X's approximate gross-margin percentage? (Round all intermediary calculations two decimal places.) A. 171% B. 56% C. 68% D. 63%
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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Production:
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X
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5,300
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gallons
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Y
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4,200
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gallons
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Sales:
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X
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5,050
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at $300 per gallon
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Y
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3,950
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at $80 per gallon
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