Sunland Corporation manufactures a single product. Monthly production costs incurred in the manufacturing process are shown below for the production of 3,700 units. The utilities and maintenance costs are mixed costs. The fixed portions of these costs are $329 and $220, respectively. Production in Units 3,700 Production Costs Direct materials $8,235 Direct labor 23,084 Utilities 3,104 Property taxes 1,098 Indirect labor 4,941 Supervisory salaries 2,086 Maintenance 1,885 Depreciation 2,635 (A) Identify the above costs as variable, fixed, or mixed. Costs Direct materials FixedMixedVariable Direct labor FixedMixedVariable Utilities FixedMixedVariable Property taxes FixedMixedVariable Indirect labor FixedMixedVariable Supervisory salaries FixedMixedVariable Maintenance FixedMixedVariable Depreciation FixedMixedVariable (B) Calculate variable costs per unit, variable cost per unit for utilities and variable cost per unit for maintenance. Exclude mixed costs in the calculation for variable cost per unit. (Round answers to 2 decimal places e.g. 2.25.) Variable cost per unit (Exclude variable cost for utilities and maintenance) $ Variable cost per unit for utilities $ Variable cost per unit for maintenance $ (C) Calculate the expected costs when production is 5,490 units. Cost to produce 5,490 units $Type your answer here
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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Production in Units
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3,700
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Production Costs
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| Direct materials | $8,235 | |
| Direct labor | 23,084 | |
| Utilities | 3,104 | |
| Property taxes | 1,098 | |
| Indirect labor | 4,941 | |
| Supervisory salaries | 2,086 | |
| Maintenance | 1,885 | |
| 2,635 |
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Costs
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| Direct materials |
FixedMixedVariable
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| Direct labor |
FixedMixedVariable
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| Utilities |
FixedMixedVariable
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| Property taxes |
FixedMixedVariable
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| Indirect labor |
FixedMixedVariable
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| Supervisory salaries |
FixedMixedVariable
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| Maintenance |
FixedMixedVariable
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| Depreciation |
FixedMixedVariable
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(B) Calculate variable costs per unit, variable cost per unit for utilities and variable cost per unit for maintenance. Exclude mixed costs in the calculation for variable cost per unit. (Round answers to 2 decimal places e.g. 2.25.)
| Variable cost per unit (Exclude variable cost for utilities and maintenance) |
$
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| Variable cost per unit for utilities |
$
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| Variable cost per unit for maintenance |
$
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(C) Calculate the expected costs when production is 5,490 units.
| Cost to produce 5,490 units |
$Type your answer here
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