Answer to Question #2553 in Microeconomics for gurusamy

Question

Identify and describe an appropriate costing systems and techniques based on the information given.
Estimate vavariable cost would be 25% more.
buy a cutting mechine $45000. Employed 3 full-time staff with those costing $63000 more a year in wages.

Answer 1

Costing systemis a manner of monitoring expenditures of a business entity. In this case it is absorption-costing in costing system. Because we have variable cost, which is used in this system and we take into account the cost of each of the activities.
Description of absorption-costing technique:
This technique takes into account the cost at which a product is manufactured, the costs for sales and marketing the product and values the finished goods in inventory. It is helpful in determining the variable and fixed overhead costs of the manufactured products. Intelligent planning and adoption of just-in-time supply methods will help contain overhead costs, thereby optimizing cost of production.