S. Lee Enterprises produces two models of lawn tractor: SL1 and SL2. The models are both produced in the company's Louisville factory and go through identical assembly operations. The difference is in the quality (hence, cost) of the parts used. The following data are available for November, the latest month for which information is available: SL1 1,650 $ 1,250 SL2 2,150 $ 1,750 Total 3,800 Number assembled Materials cost per tractor Other costs: Direct labor Supplies Other overhead $1,550,000 550,000 2,840,000 Required: S. Lee Enterprises uses operations costing and assigns conversion costs based on the number of units assembled. Compute the cost of each model assembled in November. SL1 Total SL2 Operation cost $ Materials cost Total cost Number of units Unit cost
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.
S. Lee Enterprises uses operations costing and assigns conversion costs based on the number of units assembled. Compute the cost of each model assembled in November.
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