First Buy Company provided the following manufacturing costs for the month of June. Direct labor cost $136,000 Direct materials cost 80,000 Equipment depreciation (straight-line) 24,000 Factory insurance 19,000 Factory manager's salary 12,800 Janitor's salary 5,000 Packaging costs 18,800 From the above information, calculate First Buy's total variable costs.
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.
First Buy Company provided the following
Direct labor cost $136,000
Direct materials cost 80,000
Equipment
Factory insurance 19,000
Factory manager's salary 12,800
Janitor's salary 5,000
Packaging costs 18,800
From the above information, calculate First Buy's total variable costs.
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