greater differences between relative proportions of indirect resources used by cost objects because traditional cost assignments based on volume-related measures do not accurately reflect these differences. 5-2 Volume-based traditional product costing systems that use only drivers that vary directly with the volume of products produced—such as direct labor dollars‚ direct labor hours‚ or machine hours—are most likely to distort product costs under the following two conditions: (1) Indirect and
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No‚ I would not recommend TRU continue to allocate the building-related costs only to the preschool program because it is not an accurate way to compute the actual costs for Birthday Party product. I would suggest TRU to use the activity based costing allocation method. To use this method‚ I would need additional information on: exact labor hours spent both on preschool class and birthday party‚ and the exact number of children who are attending preschool program and the birthday party. 3.
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Also they need to know why the new products are giving fewer profit margins than the old products. Besides the competition has also intensified and companies are increasingly producing greater variety of products and services. Activity Based Costing They are currently 6 categories of support expenses that are being allocated to pen production Expense Category | Expense | Indirect Labor | 20000 | Fringe Benefits | 16000 | Computer Systems | 10000 | Machinery | 8000 | Maintenance |
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1. Product costs used for pricing and product-mix decisions generally include: Answer | | manufacturing costs only | | | design costs plus manufacturing costs | | | all costs incurred along the value chain | | | distribution costs only | 0.1 points Question 4 Within the relevant range‚ if there is a change in the level of the cost driver‚ then: Answer | | fixed and variable costs per unit will change | | | fixed and variable costs per unit will remain the
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Sometimes a cost that is mostly variable. The plots help determine whether regression analysis should be performed using any of the potential drivers. 6. Why the cost per unit under the traditional costing system is different from the cost per unit under the ABC system. In the traditional costing system‚ the indirect costs were combined into a single cost pool and then allocated based on direct labor hours used by each order. Direct labor hours may or may not
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Questions A. Specialist cost & mgt. accounting techniques 2/7-4/7‚ 7-11‚ 14-18‚21-22/7….. 2 weeks BPP Kaplan 1. Activity-based costing 4 2a 1 Triple (Pilot-1)‚Linacre(D05-3) Jola (J08-4)‚ Gadget (D10-4) Wash co D12-(except cii) Photocopy*CIMA‚ Duff Co J14 2. Life-cycle costing 2 2c 1 Wargrin (D08-4)‚ Fit Co(D11-4(a)&(c))‚ 3. Target costing 2 2b 1 Edward (D07-1)‚ UHS (J12-2) 4.Throughput accounting 4 2d 1 MN Ltd‚ Flopro Yam Co (J09-1)‚Thin Co (J11-5)‚ Solar
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existed within Global Electronics to warrant considering ABC as a possible solution? When these preexisting conditions exist‚ why does ABC offer a better solution than traditional cost systems? The warning signs that existed within GEI to warrant ABC costing began “In 1999‚ GEI’s profitability spiraled downward with operating losses reaching $100 million on sales of approximately $650 million‚ causing management concern about the accuracy of the company’s standard cost system. There was a feeling that
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ABC System in Super Bakery Inc. (Introduction) – What strategies did the management of Super Bakery‚ Inc. use? Installation of the Activity-Based Costing System Super Bakery was formed in the 1980’s during a time when the barrier to entry into the baked goods industry was limited. They started the company using the industry’s standards and following them very strictly. The first four years of Super Bakery were not profitable and management knew they had to make changes so the company could
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DOWNLOAD ANSWERS Page 1 1. (TCO 1) A difference between actual costs and planned costs 2. (TCO 1) Which of the following is not likely to be a fixed cost? 3. (TCO 2) Which of the following is not a manufacturing cost? 4. (TCO 2) A job-order costing system is likely used by a 5. (TCO 3) Equivalent units are calculated by 6. (TCO 3) The Freedom Corporation’s painting department had a beginning inventory of 580 units‚ which had direct material costs of $22‚715. During June‚ 9‚290 units were started
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demonstrate in detail. Another part is about the two calculation methods that using by companies when measure expenses and overheads. This will be show through the calculation process in detail for a Peppa Ltd by using the traditional costing methods and activity-based costing methods. A briefly explains will also be given on which set of calculations is most accurate. Part A World Class Manufacturing Today companies are trying hard to apply various Production Systems in order to achieve their aims. As
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