Life-cyde product costing, Activity-based costing OPQ Products makes digital watches. OPQ is preparing a product-ife cyde budget for a new a watch, SIEKO 6. Development on the new watch is to start shortly. Estimates for SIEKO 6 are as follows: Life-cyde units manufactured and sold Seling prices per watch Life-cyde costs R&D and Design Costs Manufacturing Variable cost per watch Variable cost per batch Watches per batch 400,000 $ 40.00 $1,000,000.00 $ 15.00 $ 600.00 500 $ 1,800,000.00 Fixed Costs Marketing Variable cost per watch Fixed costs $3.20 $ 1,000,000.00 Distribution Variable cost per batch Watch per batch Fixed costs $ 280.00 160 $ 720,000.00 $1.50 Customer-service cost per watch Ignore the time value of money. 1. Calkulate the life cyde costs and the budgeted life-cyde operating income for the new watch. 2. What percentage of the budgeted total product life-cyde costs will be incurred by the end of the R&D and design stage?
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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