..ipany makes 1,500 units of a product for which the profitability statement is given below: Sales Direct materials Direct labour Variable OH Subtotal varlable cost Fixed cost Total cost 30,000 36.000 15,000 81,000 15,800 Rs. 1,20,000 97.800 Profit 22,200 After the first 500 units of production, the company has to pay a premium of Rs. 6 per unit towards overtime labour. The premium so pald has been included in the direct labour cost of Rs. 36,000 given above. You are required to compute the Break-even point.
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.
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