Zap Video Inc. produces two basic types of video games, Clash and Slash. Pertinent data follow: Sales price (per unit) Costs (per unit): ClashSlash $250 $172 Direct materials Direct labor 68 42 36 Variable factory overhead (@ $15 per DLH) 45 Allocated fixed factory overhead (based on DLHs) Marketing expenses (all variable) Total costs Operating income (per unit) 285 60 15 36 12 35 32 220 161 $30 $11 There is insufficient labor capacity in the plant to meet the combined demand for both Clash and Slash. Both products are produced through the same production departments. In view of the labor shortage, which of the two products is most profitable, and how much is the contribution margin, per direct labor hour? O Slash, $23.00 O Clash, $30.00 O Clash, $11.00.
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.
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