- customer has requested a quotation for a machining job consisting of 80 parts. The starting work part is a casting that will cost $17 per casting. The average production time of the job is 13,80 min on an automatic machine whose equipment cost rate is 66 $/h. This rate does not include any overhead costs. Tooling cost is $0,35 per part. The factory overhead rate is 128% and the corporate overhead rate is 230%. These rates are applied only to time and tooling costs, not starting material costs. The company uses a 15% markup (profit margin) on total cost for its price quotes. What is the quoted price for this job?
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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