E. Bunny owns a factory that produces 15,000 individual egg dyes per season that are used for the production of egg decorating kits. E. Bunny was recently approached by an outside supplier (R. Rabbit) that offered to produce the dyes at $15 per unit. Purchasing from R. Rabbit will give E. Bunny unused space, which can be rented out for $130,000. E. Bunny has provided the following information about the costs associated with producing their egg dyes: Direct materials Direct labour Per unit costs Variable manufacturing overhead Allocated common Fixed manufacturing overhead $2 $3 $1 Costs at production of 5,000 dyes $30,000 $45,000 $15,000 $4 $60,000 Total $10 $150,000 Should E. Bunny purchase their dye from the outside supplier R. Rabbit? Yes, profits would increase by $95,000 if the outside supplier's offer is accepted No, profits would decrease by $95.000 if the outside supplier's offer is accepted Yes, profits would increase by $5,000 if the outside supplier's offer is accepted No, profits would decrease by $5,000 if the outside supplier's offer is accepted
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.
Please dont provide solution image based thanks
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
