Revenue (200,000 units) $1,600,000 Manufacturing costs: Materials cash costs 100,000 Variable overhead cash costs 80,000 Fixed overhead cash costs 125,000 Manufacturing depreciation 300,000
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.
(12 pts) 8. The following information is available for 2022 for Anderson Incorporated:
Revenue (200,000 units) $1,600,000
Materials cash costs 100,000
Variable
Fixed overhead cash costs 125,000
Manufacturing
Marketing and administrative costs:
Variable marketing cash costs 200,000
Marketing depreciation 50,000
Administrative cash costs 180,000
Administrative depreciation 20,000
Total costs $1,055,000
Operating income $545,000
All depreciation charges are expected to remain the same for 2023. Sales volume is expected to increase by 30 percent, but prices are expected to fall by 8 percent. Material cash costs are expected to decrease by 15 percent. Variable manufacturing overhead cash costs are expected to decrease by 8 percent per unit. Fixed manufacturing cash overhead costs are expected to increase by 12 percent.
Variable marketing cash costs change with volume. Administrative cash costs are expected to increase by 8 percent. Inventories are kept at zero.
Required:
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