1,399
9
Essay, 2 pages (250 words)

Job costing

Costing Affiliation Explanation to Excel Findings First scenario Contribution per unit under the existing plan is $ 8 while under the proposed plan is $14. Also, profit per unit under the current plan is $4 while under the proposed plan is $1. The finding implies that the proposal should be adopted. The view is based on the fact that since the contribution per unit in the proposed design is higher than the existing design, the firm cans maximize profit by increasing sales. As such, the firm profit will increase since the contribution margin is higher. Although in the current scenario profitability under the existing plan is higher than the proposed plan, it is factual to claim that this finding can be altered positively by increasing sales. This is because the increase in production will result to a reduction of production costs by $ 6 per unit produced. Therefore, the accumulation of variable costs will be at a slower rate when compared to the existing one.
Second scenario
Chain one and Chain two are losses making while Chain four and Chain three are profit making. Through application of the activity based costing, it has been established which Chain is profitable. The breakthrough has been realized since each cost activity is apportioned to the correct chain which incurs it. Therefore, this method is beneficial since, under traditional costing approach, the enterprise would still be running profitably while, in the real sense, only two chains are making profits. The business should conduct an analysis to evaluate whether a decision to drop Chain one and Chain two is appropriate.
References
Rosati, K., Armitage, N., & Sydney, N. (2008). The ABC of costing. St. Leonards, N. S. W.: Continuing Professional Education Dept. of the College of Law.

Thank's for Your Vote!
Job costing. Page 1
Job costing. Page 2
Job costing. Page 3

This work, titled "Job costing" was written and willingly shared by a fellow student. This sample can be utilized as a research and reference resource to aid in the writing of your own work. Any use of the work that does not include an appropriate citation is banned.

If you are the owner of this work and don’t want it to be published on AssignBuster, request its removal.

Request Removal
Cite this Essay

References

AssignBuster. (2021) 'Job costing'. 10 December.

Reference

AssignBuster. (2021, December 10). Job costing. Retrieved from https://assignbuster.com/job-costing/

References

AssignBuster. 2021. "Job costing." December 10, 2021. https://assignbuster.com/job-costing/.

1. AssignBuster. "Job costing." December 10, 2021. https://assignbuster.com/job-costing/.


Bibliography


AssignBuster. "Job costing." December 10, 2021. https://assignbuster.com/job-costing/.

Work Cited

"Job costing." AssignBuster, 10 Dec. 2021, assignbuster.com/job-costing/.

Get in Touch

Please, let us know if you have any ideas on improving Job costing, or our service. We will be happy to hear what you think: [email protected]