Present the following information to show to the management : (i) The marginal product cost and the contribution per unit. (ii) The total contribution and profits resulting from each of the following sales mixtures. (iii) The proposed sales mixes to earn a profit of $ 250 and $ 300 with total sales of A and B being 300 units. Product A Product B Direct materials (per unit) 10 Direct wages (per unit) Sales price (per unit) Fixed expenses $800 (Variable expenses are allocated to products as 100% of direct wages) Sales mixtures : (a) 100 units of Product A and 200 of B ; (b) 150 units of product A and 150 of B; (c) 200 units of product A and 100 of B 3 20 15 Recommend which of the sales mixtures should be adopted.
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.
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