La Femme Accessories Inc. produces women's handbags. The cost of producing 800 handbags is as follows: Direct materials $18,000 Direct labor 8,500 Factory overhead 5,500 Total manufacturing cost $32,000 The selling and administrative expenses are $17,000. The management desires a profit equal to 22% of invested assets of $250,000. a. Determine the amount of desired profit from the production and sale of 800 handbags. $1 b. Determine the product cost per unit for the production of 800 handbags. c. Determine the product cost markup percentage for handbags. 0% d. Determine the selling price of handbags. Cost per unit Markup per unit Selling price per unit
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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