Cost Description Amount 1.Cost of the wood that was used in manufacturing the tables. 10,000,000 2.Labour cost-For the workers who were involved in manufacture & assembly of 8,500,000 Chairs and other types of furniture during the year. 3.Annual Salary paid to a factory supervisor who supervised the manufacture & 3,800,000 assembly of tables during the year. 4.The electricity cost incurred in the manufacture of the tables during the year 800,000 5. The Annual salary paid the CEO of the company. 10,000,000 6. The cost of advertising all the company's products on social media per year. 7. Sales commission paid to the employees involved in marketing the tables during 3,000,000 6,500,000 the year. 8.The rent income that the company could earn if it rented out its factory space for 5,000,000 a whole year instead of producing tables
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.
The following information has been extracted from the cost
Required:
Using the information provided in the above table identify and explain how you classify each of the above costs according to the functional approach; Use the tables as the cost object in the classification of the costs.
Step by step
Solved in 2 steps with 1 images