The cost of electricity for running production equipment is classified as: A) B) C) D) Prime cost Product cost Yes Yes No No No Yes Yes No
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.
The overall direct costs, which may be fixed or variable, associated with producing a product for sale are referred to as prime costs. The overall cost of the production inputs required to produce a specific output is calculated by businesses using prime costs. A business can determine the prices it should charge by looking at its prime costs. A business can boost its profit or undercut its rivals' prices by reducing its prime costs.
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