ariable and Absorption Costing---Service Company Jensen's Tailoring provides custom tailoring services. After the company's first year of operations,
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.
| P7-2A | Variable and Absorption Costing---Service Company | ||||
| Jensen's Tailoring provides custom tailoring services. After the company's first year of operations, its owner prepared the following summarized data report for 2019: | |||||
| Sales (500 completed jobs) | $ 100,000 | ||||
| Tailoring costs (550 jobs): | |||||
| Direct labor | 47,000 | ||||
| Manufacturing |
|||||
| Variable | 12,000 | ||||
| Fixed | 9,000 | ||||
| Operating expenses: | |||||
| Variable | 5,600 | ||||
| Fixed | 5,800 | ||||
| Required | |||||
| a. Prepare an income statement based on full absorption costing. (Round ending inventory to the nearest $.) | |||||
| b. Prepare an income statement based on variable costing. (Round ending inventory to the nearest $.) | |||||
| c. Assume that you must decide quickly whether to accept a special one-time order to alter 50 band costumes for $125 per costume. Which income statement presents the most relevant data? Determine the apparent profit or loss on the special order based solely on these data. | |||||
|
|
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 3 images
I am having troubke understanding how to find the ending inventory. Would you mind helping me with that?
by Bartleby Expert
