Windsor Company must decide whether to make or buy some of its components. The costs of producing 59,300 switches for its generators are as follows. Direct materials Direct labour $30,243 42.696 Variable overhead Fixed overhead The company should Instead of making the switches at an average cost of $3.15 ($186,795 +59,300), the company has an opportunity to buy the switches at $2.95 per unit. If the company purchases the switches, all the variable costs and one-third of the fixed costs will be eliminated. $53,370 Prepare an incremental analysis showing whether the company should make or buy the switches. (Round per unit answers to 2 decimal places, e.g. 15.25. If an amount reduces the net income then enter with a negative sign preceding the number eg. -15,000 or parenthesis, eg (15,000)) $ 60,486 the components. Per Unit S $ Make $ Buy
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.
Ww 219.
Step by step
Solved in 3 steps
