Units produced and sold 500 units Sales price 450 per unit Direct materials 64 per unit Direct labor 68 per unit Variable manufacturing overhead Fixed manufacturing overhead 26 per unit 7,500 per month Variable selling and administrative costs 15 per unit Fixed selling and administrative costs 4,400 per month
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.
Use the following information for Exercises E21-14 and E21-15.
Concord, Inc. has collected the following data for November (there are no beginning inventories):
Computing variable costing operating income
Refer to the information for Concord, Inc.
Requirements
- Using variable costing, calculate the unit product cost.
- Prepare an income statement using the contribution margin format
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