Pedregon Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 7.30 Direct labor $ 4.20 Variable manufacturing overhead $ 1.55 Fixed manufacturing overhead $ 23,400 Sales commissions $ 0.75 Variable administrative expense $ 0.85 Fixed selling and administrative expense $ 4,900 If 6,000 units are produced, the total amount of manufacturing overhead cost is closest to: Multiple Choice A. $32,700 B. $28,200 C. $37,600 D. $23,100
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.
Pedregon Corporation has provided the following information:
| Cost per Unit | Cost per Period | ||||
| Direct materials | $ | 7.30 | |||
| Direct labor | $ | 4.20 | |||
| Variable manufacturing |
$ | 1.55 | |||
| Fixed manufacturing overhead | $ | 23,400 | |||
| Sales commissions | $ | 0.75 | |||
| Variable administrative expense | $ | 0.85 | |||
| Fixed selling and administrative expense | $ | 4,900 | |||
If 6,000 units are produced, the total amount of
Multiple Choice
Manufacturing overhead: Manufacturing costs are those costs that cannot be attributed to the units produced. These are the indirect costs that have to be apportioned to the number of units produced. The variable element of manufacturing cost depends on the production units, whereas, the fixed element of manufacturing overhead is independent of the number of units produced.
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