The following information applies to questions 15 and 16: Zeda Limited manufactures three products (A, B and C), with relevant information about each product shown in the table below: Product A B C Demand (units) 250 150 50 Sales price per unit ($) 1440 1590 1584 Contribution per unit ($) 480 530 528 Labour hours per unit 12 10 8 The number of available labour hours is limited to 1700. Question 15: How many units of product A should be produced
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 following information applies to questions 15 and 16:
Zeda Limited manufactures three products (A, B and C), with relevant information about each product shown in the table below:
|
Product |
A |
B |
C |
|
Demand (units) |
250 |
150 |
50 |
|
Sales price per unit ($) |
1440 |
1590 |
1584 |
|
Contribution per unit ($) |
480 |
530 |
528 |
|
Labour hours per unit |
12 |
10 |
8 |
The number of available labour hours is limited to 1700.
Question 15:
How many units of product A should be produced?
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