playtime manufactures video games that it sells for$37each. The company uses a fixed manufacturing overhead allocation rate of$4per game. Assume all costs and production levels are exactly as planned. The following data are from playtimes first two months in business during 2018: october november sales 1000 units 2700 units production 2200 units 2200units $ $ variable manufacturing cost per game 15 15 sales commission cost per game 3 3 total fixed manufacturing overhead 8800 8800 total fixed selling and administrative cost 7500 7500 REQUIREMENTS Compute the total product cost per game produced under absorption costing and under variable costing.
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.
playtime manufactures video games that it sells for$37each. The company uses a fixed manufacturing
- Compute the total product cost per game produced under absorption costing and under variable costing.
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