Milka Corporation has provided the following data from its activity-based costing accounting system: Activity Cost Pools Total Cost Total Activity Designing products P1,372,448 7,798 product design hours Setting up batches 33,300 740 batch set-ups Assembling products 126,160 6,640 assembly hours Data concerning company’s products: Selling price per unit P1,800 Direct materials cost per unit 500 Direct labor cost per unit 300 Units produced and sold 12,000 Actual Product design hours 8,500 Actual batch set-ups 800 Actual Assembly hours 7,000 How much is the product cost 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.
Milka Corporation has provided the following data from its activity-based costing accounting system:
Activity Cost Pools Total Cost Total Activity
Designing products P1,372,448 7,798 product design hours
Setting up batches 33,300 740 batch set-ups
Assembling products 126,160 6,640 assembly hours
Data concerning company’s products:
Selling price per unit P1,800
Direct materials cost per unit 500
Direct labor cost per unit 300
Units produced and sold 12,000
Actual Product design hours 8,500
Actual batch set-ups 800
Actual Assembly hours 7,000
How much is the product cost per unit?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 4 images
