Beantown Baseball Company makes baseballs that sell for $13 per two-pack. Current annual production and sales are 576,000 baseballs. Costs for each baseball are as follows: Direct material $2.00 Direct labor $1.25 Variable overhead $0.50 Variable selling expenses $0.25 Total variable cost $4.00 Total fixed overhead $750,000 d. Determine the company’s margin of safety in number of baseballs, in sales dollars, and as a percentage. Margin of safety in baseballs: 276,000 Margin of safety in dollars: $______ Margin of safety percentage: ______%
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.
Beantown Baseball Company makes baseballs that sell for $13 per two-pack. Current annual production and sales are 576,000 baseballs. Costs for each baseball are as follows:
| Direct material | $2.00 |
| Direct labor | $1.25 |
| Variable overhead | $0.50 |
| Variable selling expenses | $0.25 |
| Total variable cost | $4.00 |
| Total fixed overhead | $750,000 |
d. Determine the company’s margin of safety in number of baseballs, in sales dollars, and as a percentage.
Margin of safety in baseballs: 276,000
Margin of safety in dollars: $______
Margin of safety percentage: ______%
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