CHAPTER 4 ACTIVITY-BASED COSTING CHAPTER REVIEW UNIT COSTS 1. Functional-based and activity-based costing assigns costs to cost objects such as products and customers. Once costs are assigned to the cost object, the unit cost is calculated by dividing the total cost assigned to the units produced by the number of units produced. 2. Unit cost information is used to: ■ value inventory ■ determine cost of goods sold, which affects income ■ determine bids to give to potential
Words: 5746 - Pages: 23
methods pertaining to Super Bakery, Inc. This paper will layout the strategies that the management of Super Baker, Inc. used, as well as discuss why management thought it was a good idea to an activity-based costing system into their business. The comparison of a job order cost system and a process order system will be analyzed to decide which would be the best fit for Super Bakery, Inc. Super Bakery, Inc. was founded by ex-National Football League Pittsburgh Steeler play Franco Harris his vision
Words: 750 - Pages: 3
SUBJECT: Cost Accounting Systems Managerial accounting concerns utilizing information available that assists managers to plan, control, and execute the company’s performance. It emphasizes on the relationships of internal costs and internal control tools in a systematic way. In a manufacturing organization, a typical cost accounting system aims to identify and allocate costs reasonably so that the organization can estimate the profitability of its products. With the input of numerical information
Words: 453 - Pages: 2
com/shop/which-statement-is-true-or-false/ 1. The costs of activities that are classified as unit-level should be proportional to the number of units produced. 2. Batch-level activities are performed each time a batch is handled or processed, regardless of how many units are in the batch. 3. Product-level activities relate to specific products and typically must be carried out regardless of how many batches are run or units of product are made. 4. Activity-based management seeks to eliminate waste by allocating
Words: 365 - Pages: 2
com/shop/which-statement-is-true-or-false/ 1. The costs of activities that are classified as unit-level should be proportional to the number of units produced. 2. Batch-level activities are performed each time a batch is handled or processed, regardless of how many units are in the batch. 3. Product-level activities relate to specific products and typically must be carried out regardless of how many batches are run or units of product are made. 4. Activity-based management seeks to eliminate waste by allocating
Words: 365 - Pages: 2
estimates calculated under each of the two costing systems are significant. This is especially the case with regard to Job order 973. The management accountant’s calculations for the cost estimates produce the following increase/ (decrease) in reported costs: Job order 973 Job order 974 $ $ Unit cost per job under existing system 1,172·00 620·00 Unit cost per job under activity based costing 1,612·00
Words: 839 - Pages: 4
RSM 222 Case Assignment Question A1 The chocolate industry is one with many players. There are many custom bar providers as well as big players within the industry. The direct result of that is very high rivalry between competitors within the industry. The internet provides customers with the ease of obtaining information about the various types of chocolate on offer from the many chocolate makers, and that will quite possibly lead to intense price competition between chocolate makers.
Words: 2581 - Pages: 11
7 Appendix ....................................................................................................................................... 9 Exhibit 1. Net income in traditional and ABC systems. .................................................................. 12 Exhibit 2. Cost per unit based on ABC method ............................................................................... 13 Exhibit 3. Recommended Selling Prices with 35% Gross Margin ....................................
Words: 2693 - Pages: 11
Tijuana Bronze Machining A Managerial Accounting Analysis of TBM Table of Contents Introduction 3 Current Strategic Issues Facing the Firm 3 Traditional System – Costing 3 Modern View Costing 4 ABC Costing 5 Comparison/Conclusion 6 Recommendations 7 Introduction Tijuana Bronze Machining (TBM) is a company which specializes in the manufacturing of bronze valves, pumps and flow controllers. Management at TBA is having difficulties understanding the natures of the pump and flow
Words: 1505 - Pages: 7
(1) Existing Cost System Recommendations The Chicago plant must switch to the activity-based costing method from their traditional costing method to better represent overhead cost allocation margins of the Geoffrey and #106 doll. Because G.G. Toys is allocating overhead costs as a percentage of direct labor cost in their traditional costing methods, the actual cost of each doll is not accurately reflected. The Chicago plant has a very high manufacturing overhead but is only considering direct labor
Words: 466 - Pages: 2
