Grover Company has the following data for the production and sale of 2,000 units. Sales price per unit $ 800 per unit Fixed costs: Marketing and administrative $ 400,000 per period Manufacturing overhead $ 200,000 per period Variable costs: Marketing and administrative $ 50 per unit Manufacturing overhead $ 80 per unit Direct labor $ 100 per unit Direct Materials $ 200 per unit What is the prime cost per unit? Multiple Choice $100 $280 $300 $480
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.
Grover Company has the following data for the production and sale of 2,000 units.
| Sales price per unit | $ 800 | per unit |
|---|---|---|
| Fixed costs: | ||
| Marketing and administrative | $ 400,000 | per period |
| Manufacturing overhead | $ 200,000 | per period |
| Variable costs: | ||
| Marketing and administrative | $ 50 | per unit |
| Manufacturing overhead | $ 80 | per unit |
| Direct labor | $ 100 | per unit |
| Direct Materials | $ 200 | per unit |
What is the prime cost per unit?
-
$100
-
$280
-
$300
-
$480
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