Why cant prime cost be added to conversion cost to get total product cost?

Q: What is equivalent production? Explain in terms of its effect on computed unit costs.

A: Process costing: It is a type of costing method, where the direct costs are accumulated and indirect…

Q: How does a product cost differ from a general, selling, and administrative cost? Give examples of…

A: Product Cost: Product costs are the expenses directly associated with making a particular product.…

Q: What is the difference between product costs and period costs?

A: Step 1 Costs incurred for the production of goods is referred to as product cost.  Direct materials,…

Q: Explain difference between prime costs and conversion costs.

A: Prime cost: It is the cost which is incurred for manufacturing a product. It includes direct…

Q: Which is more consistent with cost-volume-profit analysis, variable costing or absorption costing?…

A: Absorption Costing: "Absorption costing is a method that allocates "direct labor, direct materials,…

Q: how do I find direct cost per unit

A: Direct Cost A direct cost is a price that is directly associated with the production of particular…

Q: Understand thedifferences between directand indirect costs

A: Cost:   It refers to the economic value incurred by an organization for manufacturing a product or…

Q: How does standard costing differ from actual costing?

A: Actual cost system: An actual cost system uses actual costs for “direct materials, direct labor, and…

Q: Why is it that product costs are distinguished from period costs?

A: Product cost is the cost that is incurred to manufacture the product. The product cost will include…

Q: Why is there a need to separate mixed cost as to variable & fixed cost?

A: Variable cost: these are the costs which vary with the units produced. These costs increase by…

Q: Explain the difference between direct costs and indirect cost

A: Direct cost is the cost incurred by the organization while performing their center business process…

Q: What is the difference between a direct cost and an opportunity cost.  Can you show the difference…

A: Direct cost and opportunity cost are two types of costs used in cost accounting.

Q: Is there a difference between relevant costs and incremental costs? Explain

A: Relevant cost: Relevant cost is the cost which is relevant in decision making of a project, and…

Q: What is normal costing?

A: Normal Costing Normal costing is refer as the method of costing which helps for derivation of cost.…

Q: Why is it necessary to distinguish between variable and fixed costs when dealing with mixed costs

A: Introduction:- Every Business expenses are classified as either fixed or variable costs. on other…

Q: COSTING METHOD. 1. What is average cost method? 2. What is FIFO cost method?

A: Solution: 1.   Average cost method: Average cost method is also known as weighted average method.…

Q: How are costs assigned differently using the average cost method?

A: Inventory valuation is the valuation of inventory at the time of its purchase and sale using…

Q: Why is it important to keep track of both direct and indirect costs? How do these costs effect…

A: (a )If we keep a tracking record of direct and indirect costs we can determine the firm's…

Q: Why are the terms direct costs and indirect costs independent of the terms fixed costs and variable…

A: The terms "direct costs" and "indirect costs" are independent of the terms "fixed costs" and…

Q: What is the unit product cost under variable costing

A: Variable Cost :— It is the cost that changes with change in units. It is constant in per unit for…

Q: What is the difference between fixed costs and variable cost

A: Cost accounting is one of the important branch of accounting being used in business. Under this,…

Q: re the difference between traditional product costs and activity-based product

A: Traditional product costs: The traditional method of allocating product costs is to allocate the…

Q: What is the difference between total costs and marginal costs?

A: Total cost is the total economic cost of production. Variable cost changes according to the quantity…

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.