Direct labour 5 Direct material 8 Variable production overhead 2 Fixed production overhead 5 Standard production cost 20 The fixed production overhead figure has been calculated on the basis of a budgeted normal output of 36,000 units per annum. The fixed production overhead actually incurred in March was $15,000 Selling and admin expense Fixed $10,000 per month Variable 15% of the sales value The selling price per unit is $50 and the number of units produced and sold were: Production 2,000 Sales 1,500 1a Prepare the absorption costing and marginal costing statements of profit or loss for March
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.
Direct labour 5
Direct material 8
Variable production
Fixed production overhead 5
The fixed production overhead figure has been calculated on the basis of a budgeted normal output of 36,000 units per annum.
The fixed production overhead actually incurred in March was $15,000
Selling and admin expense
Fixed $10,000 per month
Variable 15% of the sales value
The selling price per unit is $50 and the number of units produced and sold were:
Production 2,000
Sales 1,500
1a Prepare the absorption costing and marginal costing statements of profit or loss for March
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