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The Good Buy Company produces a single product. The cost characteristics of the product and of the manufacturing plant are given below:
Number of units produced each year......$6,000Variable costs per unit:Direct materials ...............$2Direct labor ...............$4Variable manufacturing overhead ........$1Variable selling & administrative expense ....$3Fixed costs per unit:Manufacturing overhead.........$30,000Selling & administrative expense..........$10,000
Under the variable costing method:
(1) Compute the cost of a unit of product (2) Prepare a variable costing income statement if 5,000 units are sold at a price of $20. Assume beginning inventory is equal to zero (0).
Joe's Pizzeria was the only delivery based pizza chain serving a small college town for more than 20 years.
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Mateo Company's average cost per unit is $1.425 at the 16,000-unit level of activity and $1.38 at the 20,000-unit level of activity.Note: you need to calculate a total cost.
1.What are the refinements that have been made to enhance the efficiency and effectiveness of ABC in managing costs? Why do you think ABC costing is more or less efficient than job order costing? Please provide an example.
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