Following is the information provided by the concerned departments about two components FRAME and VASE regarding their replenishment and usage: Minimum usage 25 units per week each Maximum usage 75 units per week each Average usage 50 units per week each Re-order quantity Frame 300 units Vase 500 units Re-order period Frame 4 to 6 weeks Vase 2 to 4 weeks Emergency lead time Frame 2 weeks Vase 1 week Calculate for each component: Re-order level, Maximum stock level, and Minimum stock level, Danger stock level.
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.
Following is the information provided by the concerned departments about two components FRAME and VASE regarding their replenishment and usage:
Minimum usage 25 units per week each
Maximum usage 75 units per week each
Average usage 50 units per week each
Re-order quantity Frame 300 units
Vase 500 units
Re-order period Frame 4 to 6 weeks
Vase 2 to 4 weeks
Emergency lead time Frame 2 weeks
Vase 1 week
Calculate for each component:
- Re-order level,
- Maximum stock level, and
- Minimum stock level,
- Danger stock level.
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