Unit Cost, No Work-In-Process Inventories Lising Therapy has a physical therapist who performs electro-mechanical treatments for its patients. During April, Lising had the following cost and output information: Direct materials $750 Hygienist's salary $4,250 Overhead $5,000 Number of treatments 100 Required: 1. Calculate the cost per treatment for April. $fill in the blank 1 per treatment 2. Calculate the cost of services sold for April. $fill in the blank 2 3. What if Lising found a way to reduce overhead costs by 20 percent? How would this affect the profit per treatment? Profit would be by $fill in the blank 4 per treatment
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.
Unit Cost, No Work-In-Process Inventories
Lising Therapy has a physical therapist who performs electro-mechanical treatments for its patients. During April, Lising had the following cost and output information:
| Direct materials | $750 |
| Hygienist's salary | $4,250 |
| $5,000 | |
| Number of treatments | 100 |
Required:
1. Calculate the cost per treatment for April.
$fill in the blank 1 per treatment
2. Calculate the cost of services sold for April.
$fill in the blank 2
3. What if Lising found a way to reduce overhead costs by 20 percent? How would this affect the profit per treatment?
Profit would be by $fill in the blank 4 per treatment
Total cost of services include all the cost incurred for the service provided such as salary, overhead cost etc.
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