Boulder Toys manufactures powered, ride-on tractors and other equipment for children. There are three models, increasing in features and detail: XL, XLS, and XLT. All three models start in the Assembly Department, where the raw material is shaped and components, such as tires and motor, are assembled. The XL and XLS model are then sent to the Packaging Department where they are made ready for delivery to dealers. The XLT model is sent from the Assembly Department to the Customization Department where it is detailed with various special order paints and logos. Boulder Toys uses operations costing and conversion costs are allocated to products based on the number of units produced. No work-in-process inventories exist in any of the three departments. Data for October follow: Total Units produced 3,800 XL 1,800 XLS XLT 1,350 650 Costs: Materials $ 559,150 $156,600 $ 180,900 $221,650 Conversion costs Assembly $ 307,800 Customization Packaging Total conversion cost 27,950 72,200 $ 407,950 Required: What is the cost per unit transferred to finished goods inventory for each of the three models in October? XL XLS XLT Cost per unit $ 191 $ 238 $ 465
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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