Describe the basic financial statements , their purpose and their importance to various internal and external users. Clearly discuss which users are most interested in which financial statement and why
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.
Consider zagol manufacturing which is engaged in the manufacturing of product ABC. To produce one unit of the product the company incurs the following costs:
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- Direct material ______$5/kg
- Direct labor_________$10/hour
- Total Manufacturing
overhead __________________$30000
The company produces a total of 10000 units per month. And the actual price the product is sold is around $24. Company XYZ offers to buy a total of 5000 units this month at the price of $ 17/unit. Would you accept the order if you are the manager? (assume 20% of the manufacturing overhead is variable cost).
1.Describe the basic financial statements , their purpose and their importance to various internal and external users. Clearly discuss which users are most interested in which financial statement and why.
2. Form question one above considering all the
3.Evaluate sunk costs and fixed costs from the perspective of relevant information for decision making.
4. Why is accounting called the language of business? Support with example
I need to get answer for number 1 which is
1. Describe the basic financial statements , their purpose and their importance to various internal and external users. Clearly discuss which users are most interested in which financial statement and why?
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