Pennington Inc. makes tables. The cost to manufacture an unfinished table is $37. Below is detail information of manufacturing cost per unit. Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead $15 $10 a. $5000 b.$1600 c. $6400 d. $3400 $8 $4 The selling price per unfinished unit is $50. Company has unused capacity that can be used to finish the tables and sell them at $60 per unit. For a finished table, direct materials will increase $3 and direct labor costs will increase $2. Variable manufacturing overhead costs will be 80% of direct labor costs. No increase is anticipated in fixed manufacturing overhead. If the company choose to produce 1000 finished tables, net income will increase by
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.
Dd.21.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
