Total and Unit Product Cost Martinez Manufacturing Inc. showed the following costs for last month: Direct materials $7,000 Direct labor 3,000 Manufacturing overhead 2,000 Selling expense 8,000 Last month, 4,000 units were produced and sold. Required: Classify each of the costs as product cost or period cost. Direct materials Direct labor Manufacturing overhead Selling expense What is the total product cost for last month? $ What is the unit product cost for last month? $per unit
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.
Total and Unit Product Cost
Martinez Manufacturing Inc. showed the following costs for last month:
|
Direct materials |
$7,000 |
|
Direct labor |
3,000 |
|
Manufacturing |
2,000 |
|
Selling expense |
8,000 |
Last month, 4,000 units were produced and sold.
Required:
- Classify each of the costs as product cost or period cost.
|
Direct materials |
|
|
Direct labor |
|
|
Manufacturing overhead |
|
|
Selling expense |
|
- What is the total product cost for last month?
$ - What is the unit product cost for last month?
$per unit
Product Cost in Total and Per Unit
Grin Company manufactures digital cameras. In January, Grin produced 4,000 cameras with the following costs:
|
Direct materials |
$400,000 |
|
Direct labor |
80,000 |
|
Manufacturing overhead |
320,000 |
There were no beginning or ending inventories of WIP.
Required:
- What was the total product cost in January?
The total product cost in January is $. - What was the product cost per unit in January?
The product cost per unit in January is $.
Prime Cost and Conversion Cost
Grin Company manufactures digital cameras. In January, Grin produced 4,000 cameras with the following costs:
|
Direct materials |
$400,000 |
|
Direct labor |
80,000 |
|
Manufacturing overhead |
320,000 |
There were no beginning or ending inventories of WIP.
Required:
If required, round your answers to the nearest cent.
- What was the total prime cost in January?
$ - What was the prime cost per unit in January?
$per unit - What was the total conversion cost in January?
$ - What was the conversion cost per unit in January?
$per unit
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