ellow Company has the capacity to manufacture 20,000 units per month. However, present plans call for monthly production and sales of 15,000 units at P21.00 each. Costs per unit are as follows: Direct materials P7.00 Direct labor 4.20 Variable factory overhead Fixed factory overhead Variable marketing expenses Fixed administrative expenses 1.05 2.10 0.35 140 P16.10 Total Assume that Yellow Company accepted a special order of 5,000 units at P15.00 per unit, the decrease or increase in contribution margin shall amount to a. P5,500 decrease b. P12,000 decrease c. P12,000 increase d. P13,750 increase e. None of these; answer is _ 8. Refer to no. 7. The unit cost figure the company would use in costing inventory using direct costing is a PI2.25 b. P12.60 c. P14.70 d. P16.10 e. None of these; answer is
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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