Question

need this question answer.

1. Prepare a CVP graph showing Total Cost line, Total Fixed Cost line, Total Revenue line, Break-even point, Profit area, and Loss area.

2. Describe the differences between a job-costing system and a process-costing system. Provide 2 examples of each system.

Answer 1

the area which is in blackish is the loss area.

350 Profit Arca Sales Line 300 Total Cost Line Costs 250 - ВЕР and Revenues (Rs. 100) 200 150+ Variable Cost Margin of Safety 100- Fixed Cost Line 600 Fixed Cost - 05.000 10.000 15.000 20,000 25,000 30,000 Output (units)

2. Differences between a job costing and a process costing are as follows :-

Job costing all detail accumulation production cost attributable to specific units for a group of units. For example, construction of a custom designed piece of furniture would be accounted for with a job costing system. The cost of labour the specific item of furniture would be recorded on a timesheet and then compile on a cost sheet for the job. similarly, any wood or other parts used in the construction of the furniture would be charged to the production job into the piece of furniture. this information may then be used to build the customers for work performed in material used, or to track the extent of the companies office on the production job associated with the specific item of furniture.

Process costing involves the accumulation of cost fall in the production runs involving products that are indistinguishable from each other. For example, the production of 100000 gallons of gasoline would required that all oil used in the process, as well as all labour in the refinery facility be accumulated into cost account, and then divided by the number of units produced to arrive at the cost per unit. Costs are likely to be accumulated at the department level, and no lower within the organisation.

Given this descriptions of job costing and process costing, we can arrive at the following differences between the two costing methodologies :-

A. Uniqueness of product :- job costing is used for unique products, and process costing is used for standardized products.

B. Size of job :- job costing is very useful for small production runs, and process costing is used for large production runs.

C. Record keeping :- much more record keeping is required for job costing, since time and material must be charged to specific jobs. Process costing aggregates cost, and also requires less record keeping.

D. Customer billing :- job costing is most likely to be used for billings to customers, since the details the exact cost consumed by the project commissioned by customers.

in situations where a company has a mixture production system that produces in large quantities but then customer is the finished product prior to shipment, it is possible to use elements of both the job costing and process costing, which is known as hybrid costing.

job costing and process costing can be used in both manual and computerized accounting environment.

These are all the information and examples required to solve the above given questions.

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