A B Manual Semi-Automatic Fully-Automatic Monthly fixed costs: Оссирапсу 15,000 15,000 15,000 Maintenance contract 5,000 10,000 --- Equipment lease 25,000 1,00,000 Unit variable costs (per report): Supplies 40 80 20 Labour 200 ko 60 (5 hrs x 40) (1 hr x 60) (0.25 hr × 80) Data for three altemative ways of processing the clerical work for cases brought before the LC Court System: Required (1) Calculate cost indifference points. Interpret your results. (ii) If the present case load is 600 cases and it is expected to go up to 850 cases in near future, which method is most appropriate on cost considerations?
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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