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19RQ

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Horngren'S Financial And Managerial Accounting
Found in: Page 885

Short Answer

How does a service company calculate unit cost per service?

The cost per service is computed by dividing the total number of services produced by total costs.

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Step by Step Solution

Definition of service company

A service company is defined as a company that provides service to clients or customers.

Computation of cost per service

The service company can calculate the cost per service by considering all the operating expenses. The cost per service is computed by the formulae in which total costs are divided by the total number of services.

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