Chapter 5: Activity-Based Costing MULTIPLE CHOICE QUESTIONS 1. Consider the following statements regarding traditional costing systems: I.Overhead costs are applied to products on the basis of volume-related measures. II.All manufacturing costs are easily traceable to the goods produced. III.Traditional costing systems tend to distort unit manufacturing costs when numerous goods are made that have widely varying production requirements. Which of the above statements is (are) true? A. I only. B. II
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Kaizen Costing A Report Kaizen Costing The ultimate objective of manufacturing industries today is to increase productivity through system simplification‚ organizational potential and incremental improvements by using modern techniques like Kaizen. Most of the manufacturing industries are currently encountering a necessity to respond to rapidly changing customer needs‚ desires and tastes. For industries‚ to remain competitive and retain market share in this global market‚ continuous improvement
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Marginal Costing Versus Absorption Costing The MAIN DIFFERENCE is the treatment of FIXED COSTS. This treatment can produce different profit figures.The two methods of costing produce different profit levels dependent upon the net change in the level of stock during the period.This is due to the VALUATION of the net change in stock during the period. In [...] Over/(Under) Absorption Of Overheads In earlier articles‚ we discussed about absorption costing‚ its advantages and disadvantages and
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the different proposals to improve profits Following the recent board meeting‚ we have evaluated the different proposals and come up with one project that we recommend. In doing this‚ we have calculated the change in profits compared with the draft budget and compiled the Break-even charts to justify our recommendation. Marginal Costing Profit Statement of the draft budget £(000) £ (000) Sales 1000 Less Cost of sales: Direct Materials 320 Direct wages 200
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Abstract Determining the actual valuation of manufactured assets has always been a major problem in the accounting field. The real controversy exist in the decision regarding which costs are relevant to future periods‚ and thus should be included in assets valuation‚ and which should not be charged against net income. An understanding of the relationship between costs‚ volume‚ and profit‚ enables management to set more realistic objectives for the future‚ and to make decisions with greater assurance that
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Process Costing Characteristics of Process Manufacturing • Since each product within a product line passing through the processes would receive similar ‘‘doses’’ of materials‚ labor‚ and overhead‚ costs are accumulated by process. • Process costing works well whenever relatively homogeneous products pass through a series of processes and receive similar amounts of manufacturing costs Units are homogeneous and subjected to the same operations for a given process and each unit produced in a
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progress. According to ACCA article‚ in back flush accounting costs are not associated with units until they are completed or sold. Back flush accounting is also called delayed costing‚ as costs are not allocated to production until after events have occurred. From view by other author‚ back flush accounting is a costing system that omits recording some of all of the journal entries relating to the cycle from purchase of direct materials to the sales of finished goods (Robert‚ 2011). According to
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MARGINAL COSTING [pic] SUBMITTED TO: SUBMITTED BY: Dr. Shashi Srivastav ABHISHEK KUMAR RAI
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Kaizen Costing What is Kaizen costing? Kaizen is a Japanese term that means continuous improvement. Kaizen events can be defined as making improvements through a process that emphasize small incremental amounts rather than large or radical improvement. Therefore in order to achieve this kaizen costing not include only continuous cost reduction but also continuous improvement of performance by increase the efficiency throughout the process. Why we need Kaizen costing? Market prices of a product
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Process Costing Vs. Job Order Costing Manufacturers use different types of costing systems to allocate production costs to their products and services. Two types of common product costing systems are process costing and job-order costing. While each system applies the same production costs to products‚ there are distinct variances in the application method. Process Costing o Process costing applies production costs to products based on the process they go through in the manufacturing process.
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