Variable Costing Income Statement For the Year Ended March 31, 20Y1 Sales $420,000 Variable cost of goods sold: Variable cost of goods manufactured $241,200 Inventory, March 31 (40,200) Total variable cost of goods sold (201,000) Manufacturing margin $219,000 Total variable selling and administrative expenses (51,000) Contribution margin $168,000 Fixed costs: Fixed manufacturing costs $111,600 Fixed selling and administrative expenses 33,000 Total fixed costs (144,600) Operating income $23,400 Determine the unit cost of goods manufactured, based on (a) the variable costing concept and (b) the absorption costing concept. Variable costing Absorption costing
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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