Ramort Company reports the following for its single product. Ramort produced and sold 20,600 units this year. Direct materials Direct labor Variable overhead. $ 13 per unit $15 per unit $6 per unit $ 41,200 per year $2 per unit $ 65,800 per year $ 69 per unit Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses Sales price Ramort doubles its production from 20.600 to 41,200 units while sales remain at the current 20,600 unit level. (a) Compute gross profit when production is 41,200 units under absorption costing. (b) What is the change in gross profit by increasing production from 20,600 units to 41,200 units under absorption 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.
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Subject - Accounting
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