Norton Company has the following data for one of its production departments: Theoretical velocity: 760 units per hour Productive minutes available per year: 32,000,000 Annual conversion costs: $192,000,000 Actual velocity: 304 units per hour Required: 1. Calculate the actual conversion cost per unit using actual cycle time and the standard cost per minute. Round your actual cycle time answer to three decimal places and your cost per unit answer to the nearest cent. Actual cycle time fill in the blank minutes per unit Standard cost per minute $fill in the blank per minute Conversion cost per unit $fill in the blank per unit 2. Calculate the ideal conversion cost per unit using theoretical cycle time and the standard cost per minute. If required, round your intermediate calculations and final answers to two decimal places. Theoretical cycle time fill in the blank minutes per unit Conversion cost per unit $fill in the blank per unit
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.
Cycle Time and Velocity
Norton Company has the following data for one of its production departments:
| Theoretical velocity: 760 units per hour |
| Productive minutes available per year: 32,000,000 |
| Annual conversion costs: $192,000,000 |
| Actual velocity: 304 units per hour |
Required:
1. Calculate the actual conversion cost per unit using actual cycle time and the
| Actual cycle time | fill in the blank | minutes per unit |
| Standard cost per minute | $fill in the blank | per minute |
| Conversion cost per unit | $fill in the blank | per unit |
2. Calculate the ideal conversion cost per unit using theoretical cycle time and the standard cost per minute. If required, round your intermediate calculations and final answers to two decimal places.
| Theoretical cycle time | fill in the blank | minutes per unit |
| Conversion cost per unit | $fill in the blank | per unit |
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