Listed below are costs found in various organizations.1. Property taxes, factory.2. Boxes used for packaging detergent produced by the company.3. Salespersons’ commissions.4. Supervisor’s salary, factory.5. Depreciation, executive autos.6. Wages of workers assembling computers.7. Insurance, finished goods warehouses.8. Lubricants for production equipment.9. Advertising costs.10. Microchips used in producing calculators.11. Shipping costs on merchandise sold.12. Magazine subscriptions, factory lunchroom.13. Thread in a garment factory.14. Billing costs.15. Executive life insurance.16. Ink used in textbook production.17. Fringe benefits, assembly-line workers.18. Yarn used in sweater production.19. Wages of receptionist, executive offices.Required:Prepare an answer sheet with column headings as shown below. For each cost item, indicate whetherit would be variable or fixed with respect to the number of units produced and sold; and then whetherit would be a selling cost, an administrative cost, or a manufacturing cost. If it is a manufacturing cost,indicate whether it would typically be treated as a direct cost or an indirect cost with respect to units ofproduct. Three sample answers are provided for illustration.
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.
Listed below are costs found in various organizations.
1. Property taxes, factory.
2. Boxes used for packaging detergent produced by the company.
3. Salespersons’ commissions.
4. Supervisor’s salary, factory.
5.
6. Wages of workers assembling computers.
7. Insurance, finished goods warehouses.
8. Lubricants for production equipment.
9. Advertising costs.
10. Microchips used in producing calculators.
11. Shipping costs on merchandise sold.
12. Magazine subscriptions, factory lunchroom.
13. Thread in a garment factory.
14. Billing costs.
15. Executive life insurance.
16. Ink used in textbook production.
17.
18. Yarn used in sweater production.
19. Wages of receptionist, executive offices.
Required:
Prepare an answer sheet with column headings as shown below. For each cost item, indicate whether
it would be variable or fixed with respect to the number of units produced and sold; and then whether
it would be a selling cost, an administrative cost, or a
indicate whether it would typically be treated as a direct cost or an indirect cost with respect to units of
product. Three sample answers are provided for illustration.
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