Great (Pty) Ltd started off producing a single product, called 'A' Price and cost details per unit are: Selling Price R275 Direct Material 5kgs at R20/kg R100 4 hours at R25/hr Direct Labour R100 Manufacturing Overhead R70 Net Profit R5 Product A, requires 10 hours of machine time. Actual manufacturing overheads are incurred according to the following cost volume relationship: Overheads R325 000 R700 000 Machine Hours 25 100 000 000 GREAT breakeven point in units is: 2000000/r25 GREAT break-even value is: R200000/9.090909% = R2 200000 GREAT margin of safety % assuming they sell 12000 units is 33.33% QUESTION1: The production overheads behaviour us best described as Semi-fixed Mixed Semi-variable Can be either mixed or semi-variable as they mean the same QUESTION 2:. GREAT product cost according to variable costing principles is: Prime cost of R200 Full manufacturing cost of R270 Prime cost plus variable manufacturing overhead per unit R250 QUESTION: The PV Ratio is calculated as follows: R25/R275 =9.090909% Daro ID 7-00 000
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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