price costing

Question 1

In managerial accounting, the term “?” refers to overall production cost that is incurred to manufacture products or provide services.

The precise knowledge of the cost of production helps the management to decide the price of the product in order to earn the desired profitability

Answer 1

product cost

Question 2

These are materials and supplies that are consumed
during the manufacture of a product, and which are directly identified with the product.

Items designated as direct materials are usually listed in the bill of materials file for a product.

Answer 2

DIRECT MATERIALS

Question 3

tip for direct material

Answer 3

only focus on raw materials

Question 4

tip for direct labor

Answer 4

Only include wages and benefits for those directly making the product.

Do not include wages for support staff like security, maintenance, or administrative personnel

Question 5

These are costs associated with paying workers to make a product or provide a service. The workers must be clearly involved in producing the product or providing the service.

Answer 5

DIRECT LABOR

Question 6

These are materials used in the production process, but which cannot be linked to a specific product or job. Thus they are consumed as part of the production process, but are not integrated in substantial amounts into a product or job.

Answer 6

INDIRECT MATERIALS

Question 7

tip for indirect material

Answer 7

Other Examples: Cleaning supplies, small tools, and safety equipment.

Focus on Usage: Determine if the material is used directly in the product or just supports the production process.

Indirect materials are usually cheaper and used in smaller amounts.

Question 8

It is a category of indirect costs and refers to those employees that assist the direct labor in the performance of their work.

Question 9

It is a category of indirect costs and refers to those employees that assist the direct labor in the performance of their work.

Answer 9

INDIRECT LABOR

Question 10

They are not involved directly in the service or production process. These include human resources, accountants, administration, etc

Answer 10

INDIRECT LABOR

Question 11

tip for indirect labor

Answer 11

Identify employees who support the production process but do not directly create the product.

Ensure you separate direct labor (hands-on production) from indirect labor (support roles).

Question 12

It refers to the business expenses not directly attributed to creating product or service. It can be fixed, variable or hybrid of both.

Answer 12

OVERHEAD COSTS

Question 13

tips for identifyinv overhead cost: sometimes it include rent, utilities, repair and maintenance, etc.

Question 14

formula for manufacturing cost

Answer 14

MOC= Indirect Materials Cost + Indirect Labor Costs + Overhead Costs.

Question 15

Product Cost Formula

Answer 15

Direct Material+ Direct labor+ MOC= Product Cost

Question 16

fyi: given na ang number of units produced

A _____ is a total expenditure incurred by a company to produce, store, and sell one unit of a particular product or service.

___ are synonymous with_________ (COGS).
This includes all fixed and variable costs associated with the production of a good or service.

Answer 16

unit cost

cost of goods sold

Question 17

These are production expenses that are not dependent on volume of units produced.

Answer 17

FIXED COST

Question 18

tips for getting the fixed cost: sometimes Examples are rent, insurance, depreciation, and certain salaries.

Question 19

____ vary depending on the level of output produced. A company’s variable costs increase and decrease with its production volume. When production goes up, this will increase. If volume goes down, this will decrease.

Answer 19

Variable costs

Question 20

tip for getting the variable cost is Identify costs that increase or decrease with production volume.

the cost goes up when you make more products and goes down when you make fewer products, it’s a variable cost.
Example: The cost of leather and stitching thread increases as you make more shoes.

how many products you make, it’s not a variable cost (it’s a fixed cost).
Example: The rent for your factory stays the same whether you make 10 shoes or 100 shoes.

Question 21

refers to the value that is added to the cost of the product. The value is added to the unit cost to determine the selling price of a product. It is usually expressed in percentage.

Answer 21

Mark-up

Question 22

The ____ of a product or service is the seller’s final price – how much the customer pays for something. It varies depending on the how much buyers are willing to pay, or how much are spent on production, and other variables affecting price.

Answer 22

SELLING PRICE

Question 23

si selling price, need muna ng mark up. but dont worry ksi given na ang markup. or not? haha bhala na te, basta ano analyze mo nalang

Question 24

quick tip for getting the selling prices

COMPUTE FOR THE SELLING PRICE OF THE LEATHER SHOES IF THE DESIRED MARK-UP IS 50%. - given

ANSWER P 2,461.50- total selling price

P1,641 (unit cost) doubled up again with+ (P1,641 X 0.5) : si 0.5 50% sya in decimal form

Question 25

COMPUTE FOR THE MARK-UP OF THE LEATHER SHOES IF THE SELLING PRICE IS P2,999.

ANSWER MUST BE WITH 2 DECIMAL POINTS.📌

ANSWER 82.75% (P2,999 - P1,641) / P1,641 X 100

Question 26

SELLING PRICE FORMULA:
SELLING PRICE =

Answer 26

UNIT COST + MARK-UP

Question 27

MARK-UP FORMULA:
MARK-UP =

Answer 27

SELLING PRICE – UNIT COST / UNIT COST X 100