Thursday, June 23, 2011

Which cost estimation method is being used by Jordan Company?

ACCOUNTING

Multiple Choice

At the Jordan Company, the cost of the personnel department has always been charged to production departments based upon number of employees. Recently, opinions gathered from the department managers indicate that the number of new hires might be a better predictor of personnel costs.

Total personnel department costs are $160,000.



Department A B C

Number of employees 30 270 100

The number of new hires 8 12 5


Which cost estimation method is being used by Jordan Company?

a. The industrial engineering method

b. The conference method

c. The account analysis method

d. The quantitative analysis method

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