Saira Frozen Foods, Inc., produces frozen pizzas. For next year, Saira predicts that 50,000 units will be produced, with the following total costs: Direct materials $250,000 Direct labour 90,000 Variable overhead 45,000 Fixed overhead 120,000 Required: 1. Calculate the prime cost per unit. 2. Calculate the conversion cost per unit. 3. Calculate the total variable cost per unit. 4. Calculate the total product (manufacturing) cost per unit.
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.
Saira Frozen Foods, Inc., produces frozen pizzas. For next year, Saira predicts that 50,000 units will be produced, with the following total costs:
|
Direct materials |
$250,000 |
|
Direct labour |
90,000 |
|
Variable |
45,000 |
|
Fixed overhead |
120,000 |
Required:
1. Calculate the prime cost per unit.
2. Calculate the conversion cost per unit.
3. Calculate the total variable cost per unit.
4. Calculate the total product (manufacturing) cost per unit.
Write formula wherever required, provide all the working outs. Do not just type the final answer.
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