Barnes Company manufactures three products (A, B, and C) from three raw materials Y, and Z). The following table indicates the number of pounds of each material that is required to manufacture each type of product: draun s Product Material X Material Y0o Material Z 2 bluow y 3aiub snu 2m oi ovsd bluow i alinu o 2 A B 3 2 The company has a policy of maintaining an inventory of finished goods on all three products equal to 25 percent of the next month's budgeted sales. Listed below is the sales budget for the first quarter of 2006: Product A 10,000 9,000 11,000 Product B 11,000 12,000 10,000 Product C Month Jan. Feb. 12,000 8,000 10,000 Mar. Instructions: 1. Assuming that the company meets its required inventory policy, prepare a product budget for the first 2 months of 2007 for each of the three products. 2. Assume further the following: Unit costs of materials X, Y, and Z are respectively P3, and P5. The Barnes Company has a policy of maintaining its raw matem inventories at 50 percent of the next month's production needs. Assuming that policy is satisfied, prepare a material purchases budget for all three materials in b pounds and in peso for January.
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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