Dwyran Ltd. manufactures a number of different products and has recently employed Ruth Benton as its management accountant. Ruth is currently looking at the various products and processes within Dwyran Ltd. to increase profitability, as a measure to try to avoid redundancies. Ruth has identified 4 areas of that she would like to look at first and she has asked you to provide her with the following information. Dwyran Ltd. manufacture the Newborough which it sells for £40 a unit. The direct material cost is £8 per unit. Other factory costs are £60,000 each month. The bottleneck factor of the production is the assembly of the unit, which is a labour intensive process. There are 20,000 labour hours available in assembly each month. Each unit of the Newborough takes 2 hours to assemble. Calculate the Newborough’s budgeted rate per factory hour and through put ratio for the month.
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.
Dwyran Ltd. manufactures a number of different products and has recently employed Ruth Benton as its
Ruth has identified 4 areas of that she would like to look at first and she has asked you to provide her with the following information.
-
Dwyran Ltd. manufacture the Newborough which it sells for £40 a unit. The direct material cost is £8 per unit. Other
factory costs are £60,000 each month. The bottleneck factor of the production is the assembly of the unit, which is a labour intensive process. There are 20,000 labour hours available in assembly each month. Each unit of the Newborough takes 2 hours to assemble.Calculate the Newborough’s budgeted rate per factory hour and through put ratio for the month.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
