HH Corp manufactures and sells brushes and combs. The company can sell all of either product it can make. The following data are pertinent to each respective product: Units of output per machine hour Unit selling price Unit product cost: Direct material Direct labour Brushes 8 $12.00 $1.00 $2.00 $0.50 Combs 20 $4.00 Required: (1) Prepare a production plan. (2) Calculate Net Income for each sales mix provided below: a. 320,000 brushes and 0 combs b. 0 brushes and 800,000 combs c. 160,000 brushes and 600,000 combs d. 252,630 brushes and 252,630 combs $1.20 $0.10 $0.03 Variable overhead Total fixed overhead is $380,000 The company has 40,000 machine hours available for production. (3) State what sales mix maximizes net income without violating the machine hours constraint.
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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