The manager at Mymic,LLC,a government contracting firm,uses a cost-estimation method to estimate direct manufacturing costs.The manager complained to the managerial accountant because the relationship between inputs and outputs are difficult to specify for the items related to indirect manufacturing costs and R&D costs.Which cost estimation method do they use at the company?
A)Industrial Engineering Method.
B)Conference Method.
C)Account Analysis Method.
D)Quantitative Analysis Method.
E)High-Low Method.

Question

Quizplus · Accepted Answer

The Industrial Engineering Method is used to estimate costs based on a detailed analysis of the inputs required to produce one unit of output. This method is precise for direct costs but can be challenging for indirect and R&D costs, which are less directly tied to production levels.

The Manager at Mymic,LLC,a Government Contracting Firm,uses a Cost-Estimation Method