Oak Mart, a producer of solid oak tables, reports the following data from Its second year of business. sales price per unit Units produced this year Units sold this year Units in beginning-year inventory Beginning inventory costs variable (3,000 units x $135) Fixed (3,000 units x $75) 310 per unit 120,000 units 123,000 units 3,000 units $ 405,000 225,000 $ 630,000 Total Manufacturing costs this year Direct materials Direct labor Overhead costs this year Variable overhead Fixed overhead selling and administrative costs this year variable 48 per unit 60 per unit $3,200,e00 $7,200, e00 $1,400,e00 4,200,e00 Fixed
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.
1. Prepare the current-year income statement for the company using variable costing.
2. Prepare the current-year income statement for the company using absorption costing.
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