eniyy retevani cosis jor afer decisions. Costs Iiseu decision situationIs. Cost Decision 1. Unavoidable fixed overhead 2. Direct labor 3. Original cost of old equipment 4. Joint production costs 5. Opportunity cost 6. Segment manager's salary Eliminate an unprofitable segment Make or buy Equipment replacement Sell or process further Accepting a special order Eliminate an unprofitable segment (manager will be terminated) Equipment replacement Sell or process further Equipment replacement (the amount of materials required does not change) Purchase or lease a building 7. Cost of new equipment 8. Incremental production costs 9. Direct materials 10. Rent expense Problems: Set A 23-33 Instructions For each cost listed above, indicate if it is relevant or not to the related decision. For those costs determined to be irrelevant, briefly explain why.
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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