Abc, Cost Accounting Excersises

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GUILLERMO VAJDA
COST ACCOUNTING
ASSIGNEMENT 3 CHAPTER 5 Exercises 5-29, 5-42, 5-44, 5-46, 5-50, and Problem 5-56 5-29 Al’s Speedy Gourmet, a small hamburger shop, has identify the following resources used in its operations. Each customer order is a batch. 1 Classify its costs as unit-level, batch level, product level or facilities level costs. 2 Suggest a proper driver for each item.

Bread. Unit-level. Hamburger
Hourly help- facilities level. Labor
Store rent – Facility-level.
Ground beef –Unit level. Hamburger
Catsup- unit level.
Advertising for triple burger special-Product level
Salary for the store managers- facilities level
Utilities- facilities level
$1-off-coupon for each order-batch level
Bags for each order- batch level
5-42 The Lindex General Hospital has determined the activities of a nurse including the following. Classify each item as a high value added or a low value added. -Report for duty and review patient charts. Low value

-Visit each patient and take her his temperature. High value -Update patients’ records. Low value
-Coordinate lab and radiology works. High value
-Wait for the attending physician to arrive. Low value
-Accompany attending physician. Low value
-Explain treatments to patients. High value
-Call kitchen to have the wrong meal tray replaced. Low value -Perform CPR (Cardiopulmonary resuscitation). High value

5-50
Based on the given cost information, determined the cost per unit for each product: Using the volume based system.
activity| total cost| | PDOR| | |
septup labor| 231000| | 1928560/51000| | |
equipment| 135660| | 38| | |
assembly| 739500| | | | |
materials handling| 405000| | | | |
purchasing| 92400| | | | |
inspection| 325000| | | | |
TOTAL| 1928560| | | | |
| | | | | |
PRODUCT| LH P UNIT| UNITS| DLH PRODUCT| DLH*PDOR| /UNITS| P1600| 3| 10000| 30000| 1134447| 113.4447|
P2400| 4| 4000| 16000| 605038.4| 151.2596|
P3600| 5| 1000| 5000| 189074.5| 189.0745|
TOTAL DLH| | 51000| | |

Using the ABC method.
| | | | |
| activity | total cost | Total activity| activity rate| | septup labor | 231,000.00 | 110| 2,100.00 | | equipment | 135,660.00 | 102000| 1.33 | | assembly | 739,500.00 | 51000| 14.50 | | materials handling | 405,000.00 | 27000| 15.00 | | purchasing | 92,400.00 | 770000| 0.12 | | inspection | 325,000.00 | 1300| 250.00 | | TOTAL | 1,928,560.00 |  |  |

| | | | |
1600| activity | activity rate| total activity| activity based cost| | septup labor | 2,100.00 | 10| 21,000.00 | | equipment | 1.33 | 60000| 79,800.00 | | assembly | 14.50 | 30000| 435,000.00 | | materials handling | 15.00 | 10000| 150,000.00 | | purchasing | 0.12 | 40000| 4,800.00 | | inspection | 250.00 | 100| 25,000.00 | | | | | 715,600.00 |

| | | COST p UNIT| 71.56 |
| | | | |
| | | | |
| | | | |
2400| activity | activity rate| total activity| abc|
| septup labor | 2,100.00 | 50| 105,000.00 | | equipment | 1.33 | 32000| 42,560.00 | | assembly | 14.50 | 16000| 232,000.00 | | materials handling | 15.00 | 12000| 180,000.00 | | purchasing | 0.12 | 280000| 33,600.00 | |...
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