Read the case study below and answer the questions that follow. Hendry Limited produces a mini-kitchen called Town Cook, which is enjoying extensive popularity amongst young children. The following data is available for the month: The company produces the same number of units every month, although the sales in units vary from month to month. The company’s variable costs per unit and total fixed costs have been constant from month to month. (where applicable, round off amounts to two decimal places) 2.1 Calculate the unit product cost for the month under marginal costing. 2.2 Calculate the unit product cost for the month under absorption costing. 2.3 Prepare an income statement for the month using the absorption costing method. 2.4 Prepare an income statement for the month using the Marginal costing method.
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.
Read the case study below and answer the questions that follow.
Hendry Limited produces a mini-kitchen called Town Cook, which is enjoying extensive popularity amongst young children.
The following data is available for the month:
The company produces the same number of units every month, although the sales in units vary from month to month. The
company’s variable costs per unit and total fixed costs have been constant from month to month.
(where applicable, round off amounts to two decimal places)
2.1 Calculate the unit product cost for the month under marginal costing.
2.2 Calculate the unit product cost for the month under absorption costing.
2.3 Prepare an income statement for the month using the absorption costing method.
2.4 Prepare an income statement for the month using the Marginal costing method.
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