The following information is extracted from Kobena Company’s records for Product A, Period 1; unit produced 18000 unit unit sold ( RM27 per unit) 17200 unit Budgeted units 18000 unit Variable production cost per unit RM17 Fixed cost Fixed production overheads Fixed administration costs rm45000 rm13000 There were no opening inventories at the beginning of the period. By referring to the information given for Product A, you are required to: i) Calculate the predetermined overheads absorption rate per unit based on unit of production. ii) Calculate total production cost per unit.
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 following information is extracted from Kobena Company’s records for Product A, Period 1;
| unit produced | 18000 unit |
| unit sold ( RM27 per unit) | 17200 unit |
| Budgeted units | 18000 unit |
| Variable production cost per unit | RM17 |
|
Fixed cost Fixed production |
rm45000 rm13000 |
There were no opening inventories at the beginning of the period.
By referring to the information given for Product A, you are required to:
i) Calculate the predetermined overheads absorption rate per unit based
on unit of production.
ii) Calculate total production cost per unit.
iii) The value of closing inventory in Ringgit Malaysia (RM).
iv) Prepare Absorption Costing Statement of
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