Total Amount Units Sales Variable Costs: 31,250 Per Unit $ 445,313 $ 14.25 Direct Materials $ 125,000 4.00 Direct Labor $ 28,000 0.90 Variable Manufacturing Overhead $ 66,250 2.12 Sales Commissions $ 15,625 0.50 Shipping $ 3,125 0.10 Variable Billing $ 313 0.01 Total Variable Costs $ 238,313 7.63 Contribution Margin $ 207,000 6.62 Fixed Costs: Fixed Manufacturing Overhead 40,000 Advertising 16,800 Sales and Admin. Salaries 87,300 Fixed Billing 10,000 Total Fixed Costs 154,100 Net Operating Income (Loss) $ 52,900 Using the budgeted contribution margin income statement in part E. above, calculate the following: a. Breakeven in units: b. Operating Leverage Multiplier: Given a sales volume increase of 8%, operating income will increase by: c. Percent: d. Dollars: #N/A #N/A #N/A #N/A
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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