ariable costs) / Sales b. (Fixed costs + target income) / Sales c. (Fixed costs + target income) / CM per unit d. (Fixed costs + variable costs) / CM per unit 2. The indifference point is reached when * a. The savings in variable cost is equal to the increase in fixed costs. b. The savings in variable cost
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.
1. The formula used to calculate the number of units needed in order to earn a target income is
a. (Fixed costs + variable costs) / Sales
b. (Fixed costs + target income) / Sales
c. (Fixed costs + target income) / CM per unit
d. (Fixed costs + variable costs) / CM per unit
2. The indifference point is reached when *
a. The savings in variable cost is equal to the increase in fixed costs.
b. The savings in variable cost is less than the increase in fixed costs.
c. The savings in fixed cost is equal to the decrease in variable cost.
d. The savings in fixed cost is more than the increase in variable costs.'
3. Which of the following is not an assumption used to prepare a cost-volume-profit graph? *
a. Constant sales mix
b. Constant cost fluctuations
c. Units produced equal units sold
d. Liner costs within the relevant range
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