Kirby Fasteners supplies the electronics industry with accessories for cases, disc enclosures, and so on. Below are the costs and volumes for the past six months at its Plant number 6: Kirby Fasteners Plant Number 6 January to June Results Volume (Units) Total Cost 10,400 $ 189,990 9,340 180,795 12,670 215,400 13,200 228,080 11,200 207,555 10,980 204,212 Required: Use the high-low method to estimate the monthly fixed cost of production and the variable cost of production per unit. Kirby analysts forecast a production level of 11,400 units in July. Based on the results from requirement (a), what would be the estimated production costs in July?
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.
Kirby Fasteners supplies the electronics industry with accessories for cases, disc enclosures, and so on. Below are the costs and volumes for the past six months at its Plant number 6:
| Kirby Fasteners | |
| Plant Number 6 | |
| January to June Results | |
| Volume (Units) | Total Cost |
|---|---|
| 10,400 | $ 189,990 |
| 9,340 | 180,795 |
| 12,670 | 215,400 |
| 13,200 | 228,080 |
| 11,200 | 207,555 |
| 10,980 | 204,212 |
Required:
- Use the high-low method to estimate the monthly fixed cost of production and the variable cost of production per unit.
- Kirby analysts
forecast a production level of 11,400 units in July. Based on the results from requirement (a), what would be the estimated production costs in July?
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