Swifty Company specializes in manufacturing a unique model of bicycle helmet. The model is well accepted by consumers, and the company has enough orders to keep the factory production at 10,000 helmets per month (80% of its full capacity). Swifty’s monthly manufacturing cost and other expense data are as follows. Rent on factory equipment $11,100 Insurance on factory building 1,800 Raw materials (plastics, polystyrene, etc.) 80,600 Utility costs for factory 900 Supplies for general office 400 Wages for assembly line workers 67,900 Depreciation on office equipment 900 Miscellaneous materials (glue, thread, etc.) 1,500 Factory manager’s salary 6,600 Property taxes on factory building 500 Advertising for helmets 14,100 Sales commissions 10,400 Depreciation on factory building 1,600 Compute the cost to produce one helmet. (Round answer to 2 decimal places, e.g. 15.25.) Production cost per helmet $
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.
Swifty Company specializes in manufacturing a unique model of bicycle helmet. The model is well accepted by consumers, and the company has enough orders to keep the factory production at 10,000 helmets per month (80% of its full capacity). Swifty’s monthly
| Rent on factory equipment | $11,100 | |
| Insurance on factory building | 1,800 | |
| Raw materials (plastics, polystyrene, etc.) | 80,600 | |
| Utility costs for factory | 900 | |
| Supplies for general office | 400 | |
| Wages for assembly line workers | 67,900 | |
| 900 | ||
| Miscellaneous materials (glue, thread, etc.) | 1,500 | |
| Factory manager’s salary | 6,600 | |
| Property taxes on factory building | 500 | |
| Advertising for helmets | 14,100 | |
| Sales commissions | 10,400 | |
| Depreciation on factory building | 1,600 |
| Production cost per helmet | $
|
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