Diane Buswell examined some of the accounting records and reported that Current Designs purchased 1,400 pounds of polyethylene powder for this order at a total cost of $3,640. Twenty Five (25) finishing kits were assembled at a total cost of $4,400. The payroll records showed that the type I employees worked 98 hours on this project at a total cost of $1,274. The type Il finishing employees worked 131 hours at a total cost of $1,408.25. A total of 25 kayaks were produced for this order. The standards that had been developed for this model of kayak were used in CD2 and are reproduced here. For each kayak: 52 pounds of polyethylene powder at $2.50 per pound 1 finishing kit (rope, seat, hardware, etc.) at $184 4 hours of type I labor from people who run the oven and trim the plastic at a standard wage rate of $13 per hour 5 hours of type Il labor from people who attach the hatches and seat and other hardware at a standard wage rate of $10 per hour.
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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