Helena Company reports the following total costs at two levels of production. 10,000 Units 20,000 Units Direct materials $20,000 $40,000 Maintenance 8,000 10,000 Direct labor 17,000 34,000 Indirect materials 1,000 2,000 Depreciation 4,000 4,000 Utilities 3,000 5,000 Rent 6,000 6,000 Classify each cost as variable, fixed, or mixed. Recall that a variable cost varies in total directly and proportionately with each change in activity level. Recall that a fixed cost remains the same in total with each change in activity level. Recall that a mixed cost changes in total but not proportionately with each change in activity level.
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.
Helena Company reports the following total costs at two levels of production.
|
|
10,000 Units |
20,000 Units |
|
Direct materials |
$20,000 |
$40,000 |
|
Maintenance |
8,000 |
10,000 |
|
Direct labor |
17,000 |
34,000 |
|
Indirect materials |
1,000 |
2,000 |
|
|
4,000 |
4,000 |
|
Utilities |
3,000 |
5,000 |
|
Rent |
6,000 |
6,000 |
Classify each cost as variable, fixed, or mixed.
Recall that a variable cost varies in total directly and proportionately with each change in activity level.
Recall that a fixed cost remains the same in total with each change in activity level.
Recall that a mixed cost changes in total but not proportionately with each change in activity level.
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