Tarazz Company manufactures computers. The following cost information for the manufacture of one computer has been compiled. Direct materials Direct labor Variable manufacturing overhead *Fixed manufacturing overhead Total cost per unit "The $32 amount reflects the amount of indirect cost allocated to each unit. However, as indicated, the total of these indirect costs is fixed. $48 64 48 32 $192 Tarazz has received a special order for 500 computers at a price of $175 per unit. By how much will overall company net income change if the order is accepted Company net income will DECREASE by $7,500 if the order is accepted. O Company net income will DECREASE by $8,500 if the order is accepted. Company net income will INCREASE by $8,500 if the order is accepted. O Company net income will INCREASE by $7,500 if the order is accepted.
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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