1. During the first month of operations ended January 31, Wardner Apparel produced 80,000 designer cowboy hats, of which 72,000 were sold. Operating data for the month are summarized as follows: les Category anufacturing Costs: Direct Materials Direct Labor Variable Manufacturing Costs Fixed Manufacturing Costs otal Manufacturing Costs Selling and Admin Expenses: Dollar Amount $1,500,000 1,480,000 220,000 420,000 Subtotals/Totals $4,560,000 3,620,000
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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d. Explain the reason for the differences in the amount of income from operations in (a) and (b) for
February.
e. Based on your answers to (a) and (b), did Wardner Apparel operate more profitably in January
or in February? Explain.
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