Question

In: Accounting

Best Cars, Inc is the manufacturer of best cars. Recently, best car has faced a lot...

Best Cars, Inc is the manufacturer of best cars. Recently, best car has faced a lot of competition in the market place and is looking for ways to increase profitability. Best car sells two different models A and B.

With the increased competition, management wants to see if ABC can help them better understand the cost of their cars.

Best Cars, Inc produces its cars using the following departments:

1) Flattening department – where aluminum is uncoiled and cut into blanks

2) Press lines – Where the aluminum blanks are cut to make panels

3) Body center – where cut parts are brought together

4) Framing – Where parts are joined by welding and fastening

5) Assembly: Where assembly is completed

6) Painting – where the car is painted

7) Quality control – each car is tested for durability

8) Finishing department – the finished car is moved here for transportation to car dealers.

Required:

1) What costing method would be most suitable for Best car’s product? Why?

2) Illustrate or describe the flow of cost in Best Car, Inc.

Solutions

Expert Solution

ekkarill92 answered 1 year ago
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