Sheridan Inc. uses job-order costing for its brand new line of homework machines. The cost incurred for production during 2022 totalled $6600 of materials, $2900 of direct labour costs, and $1100 of manufacturing overhead applied. The company ships all goods as soon as they are completed which results in no Finished Goods Inventory on hand at the end of any year. Beginning Work in Process Inventory totalled $5300, and the ending balance is $2900. During the year, the company completed 20 machines. How much is the cost per machine? O $530 O $650 O $795 O Not enough information is given.
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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