August 2,200 units 2,250 units September 2,000 units 1,900 units October 1,400 units 1,600 units November 1,700 units 1,500 units December 1,750 units 2,300 units Notes: (i) To make one unit of Glow skincare, four (4) units of raw material F250 is used. One unit of raw material F250 costs $40. Snow skincare uses three (3) units of raw material K200 which costs $30 each. (ii) The company has decided that raw material stocks at the end of each month should be held equivalent to fifteen percent (15%) of the budgeted sales f
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.
The following sales
Sales Forecast 2018
|
Details |
Glow skincare |
Snow skincare |
|
July |
1.500 units |
2,000 units |
|
August |
2,200 units |
2,250 units |
|
September |
2,000 units |
1,900 units |
|
October |
1,400 units |
1,600 units |
|
November |
1,700 units |
1,500 units |
|
December |
1,750 units |
2,300 units |
Notes:
(i) To make one unit of Glow skincare, four (4) units of raw material F250 is used. One unit of raw material F250 costs $40. Snow skincare uses three (3) units of raw material K200 which costs $30 each.
(ii) The company has decided that raw material stocks at the end of each month should be held equivalent to fifteen percent (15%) of the budgeted sales for the month in question.
(iii) During the year, the company sold one unit of Glow skincare for $120, while one unit of Snow skincare was sold for $140.
(iv) There should be in store sufficient finished goods stock to meet thirty percent (30%) of the sales for the next month.
Required:
Prepare the company’s sale budget for the period August to November 2018.
Prepare the production budget for both products for the period August to November 2018.
Prepare the direct raw materials usage budget for the period August to November 2018.
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