Information below is for the production and sale of 5,000 units for this year. The sales price is $300 per unit. $ Sales Variable costs Metal for casing Wages of assembly workers Stands for units Fixed costs Taxes on factory Factory maintenance Factory machinery depreciation Administrative salaries 4 1,500,000 $ 265,000 450,000 185,000 $ 12,ᎾᎾᎾ 21,000 90,000 174,000 1. Compute.contribution marnin per unit and contribution margin ratio
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.
 alt="Information below is for the production and sale of 5,000 units for this year. The sales price is $300 per unit.
Sales
Variable costs
Metal for casing
Wages of assembly workers
Stands for units
Fixed costs
Taxes on factory
Factory maintenance
Factory machinery depreciation
Administrative salaries
$ 1,500,000
$ 265,000
450,000
185,000
$ 12,000
21,000
90,000
174,000
1. Compute contribution margin per unit and contribution margin ratio.
Contribution margin per unit
Contribution margin ratio
2. Compute the break-even points in units and in sales dollars.
Break-even in units
Break-even in sales dollars
3. Compute the margin of safety in dollars and in percent.
Margin of safety in dollars
Margin of safety (%)
units
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