Big Thumbs Company manufactures portable flash drives for computers. Big Thumbs incurs monthly depreciation costs of $15,300 on its plant equipment. Also, each drive requires materials and manufacturing overhead resources. On average, the company uses 7,800 ounces of materials to manufacture 5,200 flash drives per month. Each ounce of material costs $3.00. In addition, manufacturing overhead resources are driven by machine hours. On average, the company incurs $36,400 of variable manufacturing overhead resources to produce 5,200 flash drives per month. In your calculations, round variable rate per flash drive to the nearest cent. If required, round final answers to the nearest cent. Required: 1. Create a formula for the monthly cost of flash drives for Big Thumbs. Total cost of flash drives = Fixed cost + ( Variable rate x Number of flash drives) Total cost of flash drives = $fill in the blank 3 + ($fill in the blank 4 x Number of flash drives) 2. If the department expects to manufacture 6,000 flash drives next month, what is the expected fixed cost (assume that 6,000 units is within the company's current relevant range)? $fill in the blank 5 What is the total variable cost (assume that 6,000 units is within the company's current relevant range)? $fill in the blank 6 What is the total manufacturing cost (i.e., both fixed and variable) (assume that 6,000 units is within the company's current relevant range)? $fill in the blank 7
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.
Big Thumbs Company manufactures portable flash drives for computers. Big Thumbs incurs monthly depreciation costs of $15,300 on its plant equipment. Also, each drive requires materials and manufacturing
In your calculations, round variable rate per flash drive to the nearest cent. If required, round final answers to the nearest cent.
Required:
1. Create a formula for the monthly cost of flash drives for Big Thumbs.
Total cost of flash drives = Fixed cost + ( Variable rate x Number of flash drives)
Total cost of flash drives = $fill in the blank 3 + ($fill in the blank 4 x Number of flash drives)
2. If the department expects to manufacture 6,000 flash drives next month, what is the expected fixed cost (assume that 6,000 units is within the company's current relevant range)?
$fill in the blank 5
What is the total variable cost (assume that 6,000 units is within the company's current relevant range)?
$fill in the blank 6
What is the total
$fill in the blank 7
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