Donner Company would like to estimate the variable and fixed components of its maintenance costs and has compiled the following data for six months of operations. January February March April May June $ Hours 160 $ 170 200 180 130 140 Maintenance Cost $7,180 7,435 8,500 7,690 6,610 Requirement 1: Using the high-low method of analysis, estimate variable cost per labor hour for maintenance. Round to 2 decimal places. 6,670 Requirement 2: High-low method of analysis continued. Using the value calculated in Requirement 1, calculate the total fixed cost per month for maintenance. Round to 2 decimal places.
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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