The following is the details of the cost at 70% capacity of Aaron company. It is expected that the company can produce 25,000 units in 3 months which represents 100% of the capacity. Supplies OMR 1400 Power OMR 7000 Insurance OMR 4200 Maintenance OMR 4900 Depreciation OMR 18,000 Supervision OMR 57,000 Total costs OMR 92,500 Units produced at 70% capacity 17,500 From the above table the first four costs are completely variable and the remaining are fixed. Prepare a flexible budget for 70% and 100% capacity.
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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