QUESTION 3(i) Samuel Amo Tobin, the Executive of Tobinco Pharmaceutical Co., has asked for information about the cost behaviour of manufacturing support costs. Specifically, she wants to know how much support cost is fixed and how much is variable. The following data are the only records available: Month Machine Hours Support Costs May 1400 $12,500 June 1750 $13,500 July 1000 $7,900 August 850 $9,000 September 1250 $11,000 a. Find the monthly fixed support cost and variable support cost per machine hour using the high-low method. b. Develop the support cost function of Tobinco Pharmaceutical Co. c. Estimate the support cost if the machine hours are i. 3500 hours ii. 5070 hours
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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