Ram Company has three geographic segments: New York, New Jersey, and Connecticut. Its segmented income statement for last year is shown below: Company New York New Jersey Connecticut Sales 800,000 350,000 250,000 200,000 Variable costs 440,000 140,000 120,000 CM Traceable Fixed Costs 90,000 65,000 50,000 Segment margin Common Fixed Costs Net operating income 1. What was the amount of segment margin for New York? a)$60,000 b)$70,000 c)$80,000 d)$50,000 2. If Ram Company’s total fixed costs were $305,000, how much were the company’s common fixed costs? a)$110,000 b)$80,000 c)$100,000 d)$90,000
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.
Ram Company has three geographic segments: New York, New Jersey, and Connecticut. Its segmented income statement for last year is shown below:
|
|
Company |
New York |
New Jersey |
Connecticut |
|
Sales |
800,000 |
350,000 |
250,000 |
200,000 |
|
Variable costs |
440,000 |
140,000 |
120,000 |
|
|
CM |
|
|
|
|
|
Traceable Fixed Costs |
90,000 |
65,000 |
50,000 |
|
|
Segment margin |
|
|
|
|
|
Common Fixed Costs |
|
|
|
|
|
Net operating income |
|
|
|
|
1. What was the amount of segment margin for New York?
2. If Ram Company’s total fixed costs were $305,000, how much were the company’s common fixed costs?
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