Exercise 18-46 (Algo) Total Factor Productivity (LO 18-6) Trombly Fabrication has three production facilities located in the state, each producing the same basic mix of products. Facility 1 was the original plant and the only one for several years. Facilities 2 and 3 were added recently to handle the increased volume. Data for the three facilities on output and the three primary inputs for the most recent period follow: Value of product produced Materials cost Labor cost Overhead Facility Required: a. Compute the total factor productivity for the three production facilities. Note: Round your answers to 2 decimal places. Facility 1 Facility 2 Facility 3 Facility 1 Facility 2 $540,698 $ 278,108 133,400 218,000 87,820 35,100 95,980 76,900 Total Factor Productivity Facility 31 $ 237,432 118,700 31,200 66,900
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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