Gia foods produce frozen meal, which it sellls fro $8 each. the company computes a new monthly fixed manufacturing overhead rate based on the planned number of meals to be produced that month. all costs and production levels are exactly as planned. the following data are from GIA'S Foods first month in business. sales 1000 meal production 1400 meals variable maznufacturing cost per meal 400 sales commission cost per meal 100 total fixed manufacturing overhead 700 total fixed marketing and administrative cost 600 A) compute the product cost per meal produced under absorption costing and under variable costing. B) prepare the income statement for January 2007 using variable costing c) list three situation in which marginal costing as a technique aids decision making.
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.
Gia foods produce frozen meal, which it sellls fro $8 each. the company computes a new monthly fixed manufacturing
sales 1000 meal
production 1400 meals
variable maznufacturing cost per meal 400
sales commission cost per meal 100
total fixed manufacturing overhead 700
total fixed marketing and administrative cost 600
A) compute the product cost per meal produced under absorption costing and under variable costing.
B) prepare the income statement for January 2007 using variable costing
c) list three situation in which marginal costing as a technique aids decision making.
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