Pothos manufactures two components A & B. There are to be 3,000 of unit A and 4,000 of unit B manufactured next year. The following information is available for each unit of A & B. Labor Hrs Variable Cost Unit of A 3 22 Unit of B 5 37 A total of 17,000 labor hours are available. Asub-contractoris willing supply Pothos with units ofA& B for P25 and P40 respectively. *Advise Pothos on which components should be made and calculate how many units of the other should be bought in.
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.
Pothos manufactures two components A & B. There are to be 3,000 of unit A and 4,000 of unit B manufactured next year. The following information is available for each unit of A & B.
Labor Hrs Variable Cost
Unit of A 3 22
Unit of B 5 37
A total of 17,000 labor hours are available. Asub-contractoris willing supply Pothos with units ofA& B for P25 and P40 respectively.
*Advise Pothos on which components should be made and calculate how many units of the other should be bought in.
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