Minnesota Office Products (MOP) produces three different paper products at its Vaasa lumber plant: Supreme, Deluxe, and Regular. Each product has its own dedicated production line at the plant. It currently uses the following three-part classification for its manufacturing costs: direct materials, direct manufacturing labor, and manufacturing overhead costs. Total manufacturing overhead costs of the plant in July 2017 are $150 million ($15 million of which are fixed). This total amount is allocated to each product line on the basis of the direct manufacturing labor costs of each line. Summary data (in millions) for July 2017 are as follows: Direct material costs Direct manufacturing labor costs Manufacturing overhead costs Units produced Supreme 89 16 48 125 Deluxe 57 26 78 150 Regular 60 8 24 140 What is the manufacturing cost per unit of the Supreme paper product? Total 206 50 150 415
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.
![Minnesota Office Products (MOP) produces three different paper products at its Vaasa
lumber plant: Supreme, Deluxe, and Regular. Each product has its own dedicated
production line at the plant. It currently uses the following three-part classification for its
manufacturing costs: direct materials, direct manufacturing labor, and manufacturing
overhead costs. Total manufacturing overhead costs of the plant in July 2017 are $150
million ($15 million of which are fixed). This total amount is allocated to each product line on
the basis of the direct manufacturing labor costs of each line. Summary data (in millions) for
July 2017 are as follows:
Direct material costs
Direct manufacturing labor costs
Manufacturing overhead costs
Units produced
Supreme
89
16
48
125
Answer:
Deluxe
57
26
78
150
Regular
60
8
24
140
What is the manufacturing cost per unit of the Supreme paper product?
Total
206
50
150
415](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8cf10989-71d5-4593-bec3-e0109f359c97%2F8d7d74c2-2fd2-4ff2-b899-7ea6ebaf4d88%2Fycwhlrr_processed.jpeg&w=3840&q=75)
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