A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (20,900 units): Direct materials $175,500 Direct labor 232,800 Variable factory overhead 268,300 Fixed factory overhead 96,300 $772,900 Operating expenses: Variable operating expenses $126,100 Fixed operating expenses 48,800 174,900 If 1,500 units remain unsold at the end of the month, the amount of inventory that would be reported on the variable costing balance sheet is Oa. $57,610 Ob. $48,570 Oc. $68,024 Od. $55,471
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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