Succulent juice Company manufactures and sells premium tomato juice by the gallon. Succulent just finished its first year of operations. The following data relates to this first year of operations. 80,000 70,000 $3.00 per gallon $1.45 per gallon Number of Gallons Produced Number of Gallons sold Sales Price Unit Product Cost (variable costing) Contribution Margin Total Fixed Manufacturing Overhead Total fixed Selling & Administrative Variable Selling and Administrative Costs Inventory value under absorption costing $84,000 ? $25,000 ? $29,500 Prepare an Income Statement for Succulent using the Absorption Costing Method. (Hints: How many units were in inventory? What was the cost per unit? Why is the CM only $84,000? ). 3.1 Sales COGS Gross Margin SG&A Net Income 3.2 Explain in one or two sentences, the key difference between the net income under Absorption and the net income under Variable costing. Determine the variable costing net income. Do not prepare a variable costing income statement.
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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