Bob's Bistro produces party-sized hoagie sandwiches. For next year, Bob's Bistro predicts that 50,000 units will be produced with the following total costs: Direct Materials $200,000 Direct Labor 100,000 Variable Overhead 60,000 FIxed Overhead 260,000 Required: 1. Calculate the prime cost per unit. 2. Calculated conversion cost per unit. 3. Calculate the total variable cost per unit. 4. Calculate the total product (manufacturing) cost per unit. 5. What is the number of units decreased to 40,000 in all unit variable costs stayed the same? Explain what the impact would be on the following costs: Total direct materials, total direct labor, total variable overhead, total fixed overhead, unit prime cost, and unit conversion cost. What would the product cost per unit be in this case?
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.
Bob's Bistro produces party-sized hoagie sandwiches. For next year, Bob's Bistro predicts that 50,000 units will be produced with the following total costs:
| Direct Materials | $200,000 |
| Direct Labor | 100,000 |
| Variable Overhead | 60,000 |
| FIxed Overhead | 260,000 |
Required:
1. Calculate the prime cost per unit.
2. Calculated conversion cost per unit.
3. Calculate the total variable cost per unit.
4. Calculate the total product (manufacturing) cost per unit.
5. What is the number of units decreased to 40,000 in all unit variable costs stayed the same? Explain what the impact would be on the following costs: Total direct materials, total direct labor, total variable overhead, total fixed overhead, unit prime cost, and unit conversion cost. What would the product cost per unit be in this case?
Step by step
Solved in 3 steps
