K Bose Company has total fed costs of $580.000 Total feed and variable costs are $642.500 at a production level of 185,000 units. The fixed cost per unit at a production level of 340,000 units is OA $1.65 OB. $1.39 OC. $1.47 OD. $3.00
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.
![**Transcription for Educational Website:**
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**Problem Context:**
Boise Company has total fixed costs of $500,000. Total fixed and variable costs are $642,300 at a production level of 165,000 units. The fixed cost per unit at a production level of 340,000 units is __________.
**Options:**
- A. $1.46
- B. $1.90
- C. $3.47
- D. $3.03
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**Explanation:**
This question involves calculating the fixed cost per unit at a specified production level. Fixed costs remain constant regardless of the number of units produced, so when the production level increases, the fixed cost per unit decreases.
To calculate the fixed cost per unit at a production level of 340,000 units:
1. Identify the total fixed costs, which are given as $500,000.
2. Divide the total fixed costs by the new production level to find the fixed cost per unit.
\[
\text{Fixed Cost per Unit} = \frac{\text{Total Fixed Costs}}{\text{Production Level}} = \frac{500,000}{340,000}
\]
3. Solve the expression to find the correct option.
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This problem is a typical example used to illustrate cost behavior in managerial accounting, demonstrating how fixed costs behave when production levels vary.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb9b10b67-743e-4498-b9c2-ee595c1f9618%2F3ebbe3d7-c828-43a4-ae47-f198b3736efb%2F2pxzfg_processed.jpeg&w=3840&q=75)
Fixed cost refers to the cost of the products which does not change with the increase or decrease of the sales or production volumes. Ex: Rent, salaries, property taxes etc. It changes after a certain period of time.
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