Greek Manufacturing Company produces and sells a line of product that are sold usually all year round. The company has a maximum production capacity of 100,000 units per year. Operating at normal capacity, the business earned Operating Income of $600,000 in 2020. The following cost data has been prepared for the year ended December 31, 2020. Selling price per unit. $50.00 Production Costs: Direct Materials. $10.00 Direct Labour $8.00 Variable Manufacturing Overhead $7.00 Fixed Manufacturing Overhead.. Fixed Selling & Administrative Expenses... Variable selling expense per unit $450,000 $300,000 $10.00 ...... Required:
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.
![Greek Manufacturing Company produces and sells a line of product that are sold usually all year round. The
company has a maximum production capacity of 100,000 units per year. Operating at normal capacity, the
business earned Operating Income of $600,000 in 2020. The following cost data has been prepared for the
year ended December 31, 2020.
$50.00
Selling price per unit..
Production Costs:
Direct Materials
$10.00
Direct Labour
$8.00
Variable Manufacturing Overhead
Fixed Manufacturing Overhead..
$7.00
$450,000
$300,000
Fixed Selling & Administrative Expenses..
Variable selling expense per unit .
$10.00
Required:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F04df1633-7a0f-4a4e-9a88-1ff879bc55c4%2F031ac7ad-d6d5-401c-97f7-3fe378bb55d8%2Fvnzaj6q_processed.jpeg&w=3840&q=75)
![g)
Greek's management team is concerned about the selling expenses associated with the product and
wants to reduce the variable selling expense per unit by 30%, which will see a simultaneous reduction in
the total fixed selling expenses by $30,000. If they are able to accomplish this feat, it is expected that
sales volume for the year will fall by 16%% below normal capacity. What must the new selling price per
unit be if the company wishes to meet the shareholders' profit objective for 2021? How will these
changes impact the percentage margin of safety?
h)
What are the advantages and disadvantages of the scattergram method as compared to the high-low
method?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F04df1633-7a0f-4a4e-9a88-1ff879bc55c4%2F031ac7ad-d6d5-401c-97f7-3fe378bb55d8%2Fnpoldk_processed.jpeg&w=3840&q=75)
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