Question Absorption and Variable Costing Income Statements for Two Months and Analysis During the first month of operations ended July 31, Head Gear Inc. manufactured 33,400 hats, of which 31,400 were sold. Operating data for the month are summarized as follows Sales Manufacturing costs $282,600 $170,340 Direct materials Direct labor Variable manufacturing cost Fixed manufacturing cost 43,420 20,040 16,700 250,500 Selling and administrative expenses: Variable $15,700 Fixed 11,460 27,160 During August, Head Gear Inc. manufactured 29,400 designer hats and sold 31,400 hats. Operating data for August are summarized as follows: Sales Manufacturing costs $282,600 Direct materials Direct labor Variable manufacturing cost Fixed manufacturing cost $149,940 38,220 17,640 16,700 222,500 Selling and administrative expenses: Variable $15,700 Fixed 11,460 27,160
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.
Question
Absorption and Variable Costing Income Statements for Two Months and Analysis During the first month of operations ended July 31, Head Gear Inc. manufactured 33,400 hats, of which 31,400 were sold. Operating data for the month are summarized as follows Sales Manufacturing costs $282,600 $170,340 Direct materials Direct labor Variable manufacturing cost Fixed manufacturing cost 43,420 20,040 16,700 250,500 Selling and administrative expenses: Variable $15,700 Fixed 11,460 27,160 During August, Head Gear Inc. manufactured 29,400 designer hats and sold 31,400 hats. Operating data for August are summarized as follows: Sales Manufacturing costs $282,600 Direct materials Direct labor Variable manufacturing cost Fixed manufacturing cost $149,940 38,220 17,640 16,700 222,500 Selling and administrative expenses: Variable $15,700 Fixed 11,460 27,160
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