Wilson Company plans to sell 10,000 shirts at 700 each in the coming year. Product costs include: Direct Materials – 120 Direct Labor – 130 Variable Factory Overhead – 55 Total fixed factory overhead 700,000 Additional data: Variable selling expenses is a commission of 35 per mower and fixed selling and administrative expenses totals 22,880. a. Compute for the total variable expense assuming 1500 units were sold b. Calculate the total fixed expense for the year c. Calculate break even point in units d. Calculate break even point in dollars.
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.
Wilson Company plans to sell 10,000 shirts at 700 each in the coming year. Product costs include:
Direct Materials – 120
Direct Labor – 130
Variable Factory Overhead – 55
Total fixed factory overhead 700,000
Additional data:
Variable selling expenses is a commission of 35 per mower and fixed selling and administrative
expenses totals 22,880.
a. Compute for the total variable expense assuming 1500 units were sold
b. Calculate the total fixed expense for the year
c. Calculate break even point in units
d. Calculate break even point in dollars.
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