The following costs were incurred during the most recent month for a company that makes both wooden and metal instruments: Assembly labor wages Wood Production supervisor's salary Advertising Factory rent Depreciation on factory equipment Metal Wood polish used to finish the wood instruments Factory utilities (dependent on hours) Paint Salary of product designer Depreciation on office equipment Insurance premiums for factory President's salary Glue b. Total fixed costs. Total fixed costs $ 10,400 17,100 41,900 c. Total direct costs. Total Direct Costs 8,200 19,200 8,500 13,700 940 3,000 1,800 Calculate each of the following, where the cost object is the instruments manufactured by the company: Required: a. Total variable costs. Total Variable Costs 18,300 1,000 2,000 70,000 300
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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