The following costs result from the production and sale of 4,800 drum sets manufactured by Tight Drums Company for the year ended December 31. The drum sets sell for $330 each. Variable costs Plastic for casing Wages of assembly workers Drum stands Sales commissions Fixed costs Taxes on factory Factory maintenance Factory machinery depreciation Lease of equipment for sales staff Accounting staff salaries Administrative salaries $ 158,400 470,400 201,600 148,800 7,000 14,000 74,000 14,000 64,000 144,000 Required: 1. Prepare a contribution margin income statement for the year 2. Compute contribution margin per unit and contribution margin ratio 3. For each dollar of sales, how much is left to cover fixed costs and contribute to income?
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.
Please do not give solution in image format thanku
Step by step
Solved in 5 steps
