40‚000 | | 100‚000 | | 404 | | | | 20‚000 | 20‚000 | 40‚000 | | 405 | | | | | 20‚000 | 20‚000 | | Total | 90‚000 | 120‚000 | 90‚000 | 60‚000 | 40‚000 | 400‚000 | 2 Physical Measures Method | Produced | Proportion | Joint Cost Allocation | Unit Cost | 401 | 90‚000 | (90‚000/400‚000)0.225 or 22.5% | (200‚000 x 0.225)45‚000 | (45‚000/90‚000)0.5 | 402 | 120‚000 | (120‚000/400‚000)0.3 or 30% | (200‚000 x 0.3)60‚000 | (60‚000/120‚000)0.5 | 403 | 90‚000 | (90‚000/400‚000)0.225 or 22.5%
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Assignment 2: Cost Behaviors and Allocation Prof. Gilton Grange HSA 525 Analyze the complexity of cost behaviors in health care organizations and describe how costs are classified according to their relationship with volume. Health services managers are vitally interested in how costs are affected by changes in volume. Before costs can be managed‚ one must have an understanding of how and why costs are being incurred. For‚ example medications dispensed from the pharmacy are variable costs items
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Cost allocation is a method to determine the cost of services provided to users of that service. It does not determine the price of the service‚ but rather determines what the service costs to provide. It is important to determine the cost allocation of the services‚ in order to determine a justifiable fee/charge/tax for those services. Included in cost allocation are direct‚ indirect‚ and incremental costs. Direct costs‚ or separable costs‚ are costs that are related to a single type of service
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Chapter 4: Costs and Cost Minimization Multiple Choice 1. Suppose you are a star basketball player at a major university in your sophomore year. You are sought after by several NBA teams. Which of the following choices best characterizes your opportunity cost if you choose to drop out of college and enter the NBA? a) The value of your college scholarship that you have given up. b) The skills that two more years of playing at your college would have given you along with their additional value
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Running Heading: COST ALLOCATION AND VARIANCES Cost Allocation and Variances- Chapter 12 & 13 Text Book Questions Stacey S. Swafford University of Phoenix ACC 561 Dr. Janice Mereba April 23‚ 2010 Chapter 12 Excel Application Exercise 12-59: Allocating Costs Using Direct and Step-Down Methods p. 584 Goal: Create an Excel spreadsheet to allocate costs using the direct method and the step-down method. Use the results to answer questions about your findings. Scenario: Antonio
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Allocation of Fixed Costs ACC 403 Principles of Accounting The articles describe two different approaches: Lean accounting and activity based costing. Both have pros and cons and the selection of "what is best for allocating IT" likely rests with the culture and types of businesses. I personally believe that activity-based costing‚ which essentially casts IT as a variable cost‚ making users sensitive to the requests they make of IT because every request is an incremental cost to their
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How do banks allocate their costs from the back office to the front office? On what basis are the costs allocated? On what basis do you think would be the most equitable for banks? The various business organizations and banks are seeking tremendous challenges due globalization and its emerging competitive trends. Cost allocation in banks is also one of these competitive challenges in the USA market. Now banks are also revising its polices one after another for an effective marketing strategy
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Introduction The purpose of this paper is to answer a few important questions: Why do companies allocate costs? How do companies allocate costs? And how this cost allocation can affect the decision making of the company. It is important for the companies to find the proper method to allocate the costs. Cost allocation is an important issue in many companies because many of the costs associated with designing‚ producing and distributing products and services are not easily identified with the
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True False 2. In a performance report‚ actual costs should be compared to budgeted costs at the original budgeted activity level. True False 3. The overhead spending variance and the overhead efficiency variance are useful only if variable overhead really should be proportional to the activity measure that is being used in the flexible budget. True False 4. The variable overhead efficiency variance reflects how efficiently variable overhead resources were used. True False 5. A reason for
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deluxe model. The following activity and cost information has been compiled: Number of Number of Number of Product Setups Components Direct Labor Hours Standard 3 30 650 Deluxe 7 50 150 Overhead costs $20‚000 $60‚000 Assume a traditional costing system applies the $80‚000 of overhead costs based on direct labor hours. a. What is the total amount of overhead costs assigned to the standard model? b. What is the total amount of overhead costs assigned to the deluxe model? Assume an
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