Barnes Company reports the following for its product for its first year of operations. Direct materials Direct labor Variable overhead $ 30 per unit $20 per unit $ 11 per unit $ 60,000 per year $3 per unit Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses $ 22,000 per year
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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Barnes Company reports the following for its product for its first year of operations.
$30 per unit
$20 per unit
$ 11 per unit
60,000 per year
$3 per unit
$ 22,000 per year
$
Direct materials
Direct labor
Variable overhead
Fixed overhead
Variable selling and administrative expenses
Fixed selling and administrative expenses
The company sells its product for $150 per unit. Compute contribution margin using variable costing assuming the company (a)
produces and sells 2,400 units and (b) produces 3,000 units and sells 2,400 units.
X Answer is complete but not entirely correct.
Contribution margin using variable costing
Sales
Variable expenses
Direct materials
Direct labor
Variable overhead
Contribution margin
(a) 2,400 Units Produced
and 2,400 Units Sold
✔ $
X
X
X
360,000 $
72,000
48,000 X
26,400 X
213,600 $
(b) 3,000 Units
Produced and 2,400
Units Sold
360,000✔
90,000 X
60,000 X
33,000 X
147,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa9e2337b-e18e-4354-b7a5-913e00303e03%2F80da1b2e-f810-4c4c-927e-2cc536599f57%2Fhsq2dm_processed.png&w=3840&q=75)
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