Sunland Corp. produces and sells lamp shades. It is currently planning to launch a new children's line. The following are the projected costs based on projected units sold of 106,000. Variable costs per unit: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative expenses Annual fixed costs and expenses: Manufacturing overhead per unit Selling and administrative expenses per unit D $11.60 Total manufacturing cost per unit $ 12.55 8.25 5.10 $3.10 2.55 Sunland Corp. will invest $1,080,000 for this new launch and would like to earn a $13.65 per unit return on its investment. Calculate the total cost per unit using absorption costing. (Round answer to 2 decimal places, e.g. 15.25.)
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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