Your friend, Suzie Whitson, has designed a new type of outdoor toy that helps children learn basic concepts such as colors, numbers, and shapes. Suzie’s product will target two groups: day care centers in warm climates and home school programs. Her company is Jiffy Jet and costs for last month follow: Factory rent $ 3,050 Company advertising 1,170 Wages paid to assembly workers 31,200 Depreciation for salespersons’ vehicles 2,100 Screws 510 Utilities for factory 825 Assembly supervisor’s salary 3,520 Sandpaper 160 President’s salary 5,040 Plastic tubing 4,090 Paint 240 Sales commissions 1,240 Factory insurance 1,150 Depreciation on cutting machines 2,140 Wages paid to painters 7,900 Assume that Suzie Whitson has decided to begin production of her outdoor children’s toy. Required: 1 and 2. Identify each of the preceding costs as either a product or a period cost. If the cost is a product cost, decide whether it is for direct materials (DM), direct labor (DL), or manufacturing overhead (MOH) and also identify each of the preceding costs as variable or fixed cost
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.
Your friend, Suzie Whitson, has designed a new type of outdoor toy that helps children learn basic concepts such as colors, numbers, and shapes. Suzie’s product will target two groups: day care centers in warm climates and home school programs. Her company is Jiffy Jet and costs for last month follow:
| Factory rent | $ | 3,050 |
| Company advertising | 1,170 | |
| Wages paid to assembly workers | 31,200 | |
| 2,100 | ||
| Screws | 510 | |
| Utilities for factory | 825 | |
| Assembly supervisor’s salary | 3,520 | |
| Sandpaper | 160 | |
| President’s salary | 5,040 | |
| Plastic tubing | 4,090 | |
| Paint | 240 | |
| Sales commissions | 1,240 | |
| Factory insurance | 1,150 | |
| Depreciation on cutting machines | 2,140 | |
| Wages paid to painters | 7,900 | |
Assume that Suzie Whitson has decided to begin production of her outdoor children’s toy.
Required:
1 and 2. Identify each of the preceding costs as either a product or a period cost. If the cost is a product cost, decide whether it is for direct materials (DM), direct labor (DL), or manufacturing
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