$120,000 60,000 25,000 220,000 Direct materials Direct labor Variable overhead Fixed overhead
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.
Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro
predicts that 50,000 units will be produced, with the following total
costs:
Required:
1. Calculate the prime cost per unit.
2. Calculate the conversion cost per unit.
3. Calculate the total variable cost per unit.
4. Calculate the total product (manufacturing) cost per unit
5. What if the number of units increased to 55,000 and 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?
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