Mariah Corporation has provided the following data from its activity-based costing system: Data concerning one of the company’s products, Product Maxiplus, appear below: Selling price per unit P888 Direct materials cost per unit 250 Direct labor cost per unit 180 Annual unit production and sales 8,000 Annual machine-hours 26,000 Annual orders 10,000 Annual inspection-hours 9,000 Selling and Administrative expenses are P978,600. The entity used machine-hours as the basis for plant-wide factory overhead. How much is the net income under Activity Based Costing?
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.
Mariah Corporation has provided the following data from its activity-based costing system:
Data concerning one of the company’s products, Product Maxiplus, appear below:
Selling price per unit P888
Direct materials cost per unit 250
Direct labor cost per unit 180
Annual unit production and sales 8,000
Annual machine-hours 26,000
Annual orders 10,000
Annual inspection-hours 9,000
Selling and Administrative expenses are P978,600.
The entity used machine-hours as the basis for plant-wide factory overhead.
How much is the net income under Activity Based Costing?
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