•Christine is a former sales representative at a flower market and she has the mindset like a real entrepreneur. Consequently she started her own business. She bought a truck on the second market and converted the truck into a mobile sales truck. Christine's business are plants. She sells the plants at markets, trade fairs and central locations in the region. •She has four plant products in her sales program: > Green leaves Red dream Yellow variety > Pink lady •Her sales figures of the products for the past month were as follows Sales amount 500 Sales price per item 4.50 EUR Green leaves Red dream 450 3.80 EUR Yellow variety Pink lady 300 8.20 EUR 400 7.00 EUR Continue „Christine's Mobile Plant Market" The purchase prices are as follows (euros per unit): Green leaves 2.00 Red dream 2.50 Yellow variety 3.00 Pink lady 4.00 Christine has the following additional costs: Her salary, including ancillary costs of 2,300 euros per month Vehicle costs per month without depreciation: 900 euros per month. All other monthly costs, including interest for the loan: 600 euros The depreciation is 6,000 euros per year.
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.
Please solve the task by reading attached pictures of background knowledge.
Christine wants to improve the profit situation of her company - and learn more about the profit per product for the past month.
Christine is a follower of a full costing approach. Therefore all the costs should be allocated to the products. Perform this calculation by calculating three alternatives for the distribution of fixed
? •Distribution in equal parts
? •Distribution proportional to sales ? •Distribution proportional to sales.
All three allocation keys are common allocation routes in practice. Which one should Christine prefer?
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