Monroe Manufacturing produces and sells a product with a price of $100/unit. The following data has been prepared for its estimated upper and lower levels of activity. Production Category Lower Limit Upper Limit Units of Production 4,000 units 6,000 units Direct Materials $60,000 $90,000 Direct Labor $80,000 $120,000 Manufacturing Overhead: Indirect materials $25,000 $37,500 Indirect labor $40,000 $50,000 Depreciation $20,000 $20,000 Selling and Admin. Expenses: Sales salaries $50,000 $65,000 Office salaries $30,000 $30,000 Advertising $45,000 $45,000 Other $15,000 $20,000 Totals $365,000 $477,500 The only variable expenses for this company are Question 15 options: indirect materials, direct materials, and direct labor. all categories of selling and administrative expenses. indirect materials, indirect labor, direct materials, and direct labor. None of these
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.
| Production Category | Lower Limit | Upper Limit |
| Units of Production | 4,000 units | 6,000 units |
| Direct Materials | $60,000 | $90,000 |
| Direct Labor | $80,000 | $120,000 |
| Manufacturing |
| |
| Indirect materials | $25,000 | $37,500 |
| Indirect labor | $40,000 | $50,000 |
| $20,000 | $20,000 | |
| Selling and Admin. Expenses: | | |
| Sales salaries | $50,000 | $65,000 |
| Office salaries | $30,000 | $30,000 |
| Advertising | $45,000 | $45,000 |
| Other | $15,000 | $20,000 |
| Totals | $365,000 | $477,500 |
The only variable expenses for this company are
Question 15 options:
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indirect materials, direct materials, and direct labor.
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all categories of selling and administrative expenses.
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indirect materials, indirect labor, direct materials, and direct labor.
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None of these.
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