Home Model Deluxe Model Pro Model $ 80 19 20 $ 65 Selling price Dir ect material Dir ect labor ($10 per hour) $ 58 16 20 10 15 Variable overhead 8 12 16 Fixed overhead 16 15
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.
Carpenter's Mate, Inc. manufactures electric carpentry tools. The Production Department has met all production requirements for the current month and has an opportunity
to produce additional units of product with its excess capacity. Unit selling prices and
unit costs for three dierent drill models are as follows(figure)
Variable
is applied on the basis of machine hours. There is sufficient demand for the additional
production of any model in the product line
Calculate the contribution margin per unit for each model
If Carpenter's Mate, Inc. has excess machine capacity and can add more labor as needed
(i.e., neither machine capacity nor labor is a constraint), the excess production capacity
should be devoted to producing which product? (Assume that the excess capacity will be
used for a single product line.)
Calculate the contribution margin per direct-labor hour for each model.
If Carpenter's Mate has excess machine capacity but a limited amount of labor time, the
excess production capacity should be devoted to producing which product or products?
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