Units in beginning inventory. Units produced .... Units sold ..... Units in ending inventory. ... 20,000 19,000 1,000 Variable costs per unit: Direct materials.... Direct labor .... Variable manufacturing overhead ... Variable selling and administrative $ 50 80 20 10 Total variable cost per unit . $160 Fixed costs: $700,000 Fixed manufacturing overhead Fixed selling and administrative 285,000 Total fixed costs .. $985,000
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.
Variable Costing Unit Product Cost and Income Statement; Break-Even Analysis
Chuck Wagon Grills, Inc., makes a single product—a handmade specialty barbecue grill that it sells for $210. Data for last year’s operations follow:
Required:
1. Assume that the company uses variable costing. Compute the unit product cost for one barbecue grill.
2. Assume that the company uses variable costing. Prepare a contribution format income statement for last year.
3. What is the company’s break-even point in terms of the number of barbecue grills sold?
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