On the basis of above information, what is the estimated cost for 1600 units from the following?
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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The company produced 1000 units in
January. The production manager was
asked to review these costs and
provide her best guess as to how they
should be categorized. She
responded with the following
information.
Variable
Total
Costs
Costs
Material Costs
35000
45000
Labor Costs
55000
67500
Production
Facilities cost
2500
10500
On the basis of above information,
what is the estimated cost for 1600
units from the following?
Select one:
a. 173000
b. 158500
c. 178500
d. 163750
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