d's cost accountant, presents Smoot with the following cost data for the uction of 75 sculptures: $ 8,000 30,000 37,000 33,000 25,000 15,000 Design cost Direct materials Direct manufacturing labor Variable manufacturing overhead Fixed manufacturing overhead Marketing
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.
![Question 1
Wood Creations designs, manufactures, and sells modern wood sculptures. Sally Jensen is
an artist for the company. Jensen has spent much of the past month working on the design
of an intricate abstract piece. Jim Smoot, product development manager, likes the design.
However, he wants to make sure that the sculpture can be priced competitively. Alexis
Nampa, Wood's cost accountant, presents Smoot with the following cost data for the
expected production of 75 sculptures:
$ 8,000
30,000
37,000
33,000
25,000
15,000
Design cost
Direct materials
Direct manufacturing labor
Variable manufacturing overhead
Fixed manufacturing overhead
Marketing
Required:
1. Smoot thinks that Wood Creations can successfully market each piece for $2,400. The
1)(a) ignore above info,
suppose aim to earn 20%
market price
company's target operating income is 20% of revenue.
$2,400
75units a.) Wood Creations has a total capital investment of $240,000. Compute the target
percentage of return on investment.
b.) Calculate the markup percentage on full cost based on the current cost data.
c.) Calculate the target full cost of producing the 75 sculptures. Does the cost estimate
Nampa developed meet Wood's requirements? Is value engineering needed?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F30e982b4-11c6-4596-8dd8-cd8e81808050%2F965d9c1f-0615-4ff1-be4d-2d0fe11efebb%2Frc91e3i_processed.png&w=3840&q=75)
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