The Dolomite Division of Manila Bay Corp. produces a high-quality crushed synthetic Dolomite. Unit production costs (based on capacity production of 100,000 units per year) follow: Direct material P50 Direct labor 20 Overhead (20% fixed) 10 Other information: Sales price 120 SG&A costs (40% variable) 15
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 Dolomite Division of Manila Bay Corp. produces a high-quality crushed synthetic Dolomite. Unit production costs (based on capacity production of 100,000 units per year) follow:
| Direct material |
P50
|
| Direct labor |
20
|
|
10
|
|
| Other information: | |
| Sales price |
120
|
| SG&A costs (40% variable) |
15
|
Assume that the Dolomite Division is producing and selling at capacity. What is the minimum selling price that the division would consider on a "special order" of 10,000 Dolomites on which no variable period costs would be incurred?
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