The accounting records for Miller Fixtures report the following production costs for the past year: Direct Materials $210,000 Direct Labor 175,000 Variable Overhead 154,000 Production was 210,000 units. Fixed manufacturing overhead was $240,000. For the coming year, costs are expected to increase as follows: direct materials costs by 20 percent, excluding any effect of volume changes: direct labor by 4 percent: and fixed manufacturing overhead by 10 percent. Variable manufacturing overhead per unit is expected to remain the same. A. Prepare a cost estimate for a volume level of 220,000 units of product this year.
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.
The accounting records for Miller Fixtures report the following production costs for the past year:
Direct Materials $210,000
Direct Labor 175,000
Variable
Production was 210,000 units.
Fixed manufacturing overhead was $240,000. For the coming year, costs are expected to increase as follows: direct materials costs by 20 percent, excluding any effect of volume changes: direct labor by 4 percent: and fixed manufacturing overhead by 10 percent. Variable manufacturing overhead per unit is expected to remain the same.
A. Prepare a cost estimate for a volume level of 220,000 units of product this year.
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