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 costs to products that
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now the largest single manufacturer of apparel fasteners in Europe, we can reap the benefits of economies of scale. At the moment, we are cost competitive with the Japanese. While the Japanese have lower wages and overhead, we are closer to the market and have lower selling costs. Historically, the Japanese have been most successful when they were the low-cost producer. Currently, the Japanese are pricing 20% below us. It is not enough to offset our quality advantage, but if they can match our quality
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Plan, Direct and Control Product cost vs Period costs Product costs: Direct materials, Direct labor, MOH Manufacturing Costs: COGS Manufacturing Schedule * Beginning FG Inventory + Cost of Goods Manufactured – Ending FG Inventory = COGS * Cost of Good Manufactured = Beg WIP + Total Manufacturing Costs = Total Cost of WIP * COG Manufactured = Total Cost of WIP – Ending WIP * PG 13 for illustration Chapter 2 Job order costing: assigning of costs to each job or to each batch of
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responsibility assumed by the contractor for the costs of performance, and the amount and nature of the incentive offered to the contractor for achieving or exceeding specified standards or goals. Contract types are grouped into two broad categories; Fixed-price contracts and Cost-reimbursement contracts. The specific contract types range from firm-fixed price, in which the contractor has full responsibility for the performance costs and resulting profit (or loss), to cost-plus-fixed-fee, in which the contractor
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strategy and they decided to produce only customized motors. The changes cost them Dm50 million a year for three years to replace almost every machine on the floor and support the new strategy. But after a couple of years, with the change in the strategy, the traditional cost accounting system started showing signs of trouble. This system assigned material and labor costs directly to the products and divided the overhead costs into three categories – material related, production related and support
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the price increase and no impact on demand, we can assume that Wilkerson has a great product that will continue to create demand for them and allow them to maintain appropriate margins on this product. #2) Wilkerson should abandon their current cost structure and move toward the contribution margin approach. It is very difficult to know if a product is making profit if everything
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the basis of a single predetermined overhead rate.” Although this may be the best costing method for some businesses, not all businesses are the same. Created in 1990, Super Bakery, Inc. started by using the traditional costing methods to determine costs; however, quickly came to realize that the methods were not taking individual markets into consideration. The purpose of this paper is to elaborate upon Super Bakery, Inc.’s transition from a traditional costing method to an activity-based costing
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• is usually done orally in departmental meetings. • appears on periodic budget reports. 6. A static budget • should not be prepared in a company. • is useful in evaluating a manager's performance by comparing actual variable costs and planned variable costs. • shows planned results at the original budgeted activity level. • is changed
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Week 2 Quiz Managerial Accounting Grading Summary | | Grade Details | Page: | 1 2 | 1. | Question : | (TCO F) For which situation(s) below would an organization be more likely to use a job-order costing system of accumulating product costs rather than a process costing system? | | | Student Answer: | | a steel factory that processes iron ore into steel bars | | | | a factory that processes sugar and other ingredients into black licorice | | | | a
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CASE BETA COMPANY SYNOPSIS Beta Company produces two Product A and B and standard costs of each product were predetermined by management. During November actual production for Product A was 4,200 units while Product B was 3,600 units. For material X, 39,000 pounds were purchased at $14.40 and for material Y, 11,000 pounds were purchased at $9.70. Variance analysis for actual cost versus standard cost should be prepared for the said month to be able to measure results of operations, which may
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