Plain $40 Regular $55 Super $65 Selling price Direct material 22 12 16 Direct labor (at $20 per hour) 10 20 15 Variable overhead 12 8 16 Fixed overhead 6 7 8
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.
Talmart Corporation has met all production requirements for the current month and has an opportunity to manufacture additional units with its excess capacity. Unit selling prices and unit costs for three product lines are as follows:
Variable
Required:
A. If Talmart has excess machine capacity and can add more labour as needed (i.e., neither machine capacity nor labour is a constraint), which product is the most attractive to produce?
B. If Talmart has excess machine capacity but a limited amount of labour time available, which product or products should be manufactured in the excess capacity?
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