Nascar Motors as- sembles and sells motor vehicles and uses standard costing. Actual data relating to April and May 2017 are as follows: Home Insert Page Layout Formulas Data Review D. April May 2 Unit data: 3 Beginning inventory Production Sales 6 Variable costs: Manufacturing cost per unit produced Operating (marketing) cost per unit sold 9 Fixed costs: 10 Manufacturing costs 11 Operating (marketing) costs 150 500 350 4 400 520 S 10,000 3,000 S 10,000 3,000 8. $2,000,000 600,000 $2,000,000 600,000 The selling price per vehicle is $24,000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 500 units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs.
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.
Q. Prepare April and May 2017 income statements for Nascar Motors under (a) variable costing and
(b) absorption costing.
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