Jackson Manufacturing and Trading Company Limited produces several kitchen products, one of which is a Jack grinder. One Jack grinder has a prime cost of £3.2, which includes 15 minutes of direct labour (costed at £8.2 per hour). Each unit uses 20 minutes of machine time. The company’s management accountant has estimated the following totals for the coming financial year, 2019: Machine hours available in the factory40,000 hoursDirect labour hours available80,000 hoursTotal production overheads£340,000” “Required:” “What is the estimated production cost of one Jack grinder if:” “production overheads are absorbed on the basis of machine hours?production overheads are absorbed on the basis of labour hou
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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