Waterways packages some of its products into sets for home installations. One set (small) sells for $77 with variable costs of production for the set at $50. Another set (large) sells for $149 with variable costs of $99. The parts for the $77 set take 9 machine hours to produce. The parts for the $149 set take 20 machine hours to produce. Given the information above, and assuming all of the package sets produced can be sold each month, illustrate the best use of machine hours. (Round answers to 2 decimal places, e.g. 5.25.) Small Set Large Set Contribution margin per unit of limited resource $ $
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.
Waterways packages some of its products into sets for home installations. One set (small) sells for $77 with variable costs of production for the set at $50. Another set (large) sells for $149 with variable costs of $99. The parts for the $77 set take 9 machine hours to produce. The parts for the $149 set take 20 machine hours to produce.
Given the information above, and assuming all of the package sets produced can be sold each month, illustrate the best use of machine hours. (Round answers to 2 decimal places, e.g. 5.25.)
| Small Set | Large Set | ||||
| Contribution margin per unit of limited resource | $ | $ |
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