Profit Using Accounting Costs Profit Using Opportunity Costs Total Revenue Cost Nail technicians Owner's Salary Depreciation Allowance $700,000 Total Revenue Cost Nail technicians Owner's Time $700,000 A Cost of using building and lequipment opportunity cost) $25,000 Total Cost Total Profit Happy Nails is a locally owned nail salon that is in its first year of business. The nail salon employs 8 nail technicians that are paid $31,250 each and the owner's is paid $75,000. If the owner did not own Happy Nails, she would work for a competitor for $85,000. At the beginning of the year, the building and the salon equipment are worth $100,000 and at the end of the year, they are worth $85,000. The accountant for Happy Nails uses straight-line depreciation for the 15-year life of the building and salon equipment. The table above provides some additional information on revenue and the opportunity cost of using the building and equipment. Total Cost Total Profit Refer to the table above. What is the value of A? O $31,250 $312.500 O $250.000 O $62.500
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.
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