PCB Corporation manufactures a single product. Monthly production costs in- curred in the manufacturing process are shown below for the production of 3,000 units. The utilities and maintenance costs are mixed costs. The fixed portions of these costs are $300 and $200, respectively. Production in Units 3,000 Production Costs Direct materials. $ 7,500 Direct labor 18,000 Utilities 2,100 Property taxes. 1,000 Indirect labor 4,500 Supervisory salaries 1,900 Maintenance 1,100 Depreciation 2,400 Instructions (a) Identify the above costs as variable, fixed, or mixed. (b) Calculate the expected costs when production is 5,000 units.
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.
PCB Corporation manufactures a single product. Monthly production costs in- curred in the manufacturing process are shown below for the production of 3,000 units. The utilities and maintenance costs are mixed costs. The fixed portions of these costs are $300 and $200, respectively.
Production in Units 3,000
Production Costs
Direct materials. $ 7,500
Direct labor 18,000
Utilities 2,100
Property taxes. 1,000
Indirect labor 4,500
Supervisory salaries 1,900
Maintenance 1,100
Depreciation 2,400
Instructions
(a) Identify the above costs as variable, fixed, or mixed. (b) Calculate the expected costs when production is 5,000 units.
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