Activity-Based Cost Grisel Rosas ACC/561 9/21/2015 Debra Luna Activity-Based Cost A. Activity Cost Pool Estimated Overhead Market Analysis $1,050,000 Product Design $2,350,000 Product Development $3,600,000 Prototype testing $1,400,000 Total $8,400,000 Activity Cost Pool Cost Drivers Expected Use of Cost Drivers per Activity Market Analysis Hours of analysis 15000 Hours Product Design Number of Designs 2500 Design Product Development
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submitted documents similar to the one below including study guides, practice problems, reference materials, practice exams, textbook help and tutor support. 18: CHAPTER SPOILAGE, REWORKED UNITS, AND SCRAP TRUE/FALSE 1. Reducing defects helps to reduce costs, but does not make the business more competitive. Answer: False Difficulty: 2 Reducing defects does make the business more competitive. 2. Objective: 1 Reworked goods are unacceptable units of production usually not capable of being repaired or converted
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year. GIC’s current cost allocation system must be revised to accommodate the implementation of a new management planning and performance management system. The goal is to better allocate GIC’s corporate support-service costs to the business lines and business units in a result of more precise pricing strategies, sales compensation and improved cost control. We have analyzed GIC’s situation based on the given information, and concluded with a solution to improve the old cost allocation system.
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Uitwerking Case 8-1 Allied Office Products Door: Joey de Klerk (481002) en Roel van Berkel (468870) Introductie Allied Office Products is a large corporation that builds its reputation on its annual sales of $900 million in business forms and specialty in paper products. Its paper products vary from envelopes to greeting cards and writing papers. Allied has incorporated a new program called Total Forms Controls (TFC) for its clients enabling Allied to separate this business forms division
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ascertain total cost of each of such processes and cost per unit at each process. So a separate account for each process is maintained and that method of maintaining record and ascertaining cost of production is known as process costing. Process costing is a costing method used when it is not possible to identify separate units of production, or jobs, usually because of the continuous nature of the production processes involved. Process costing traces and accumulates direct cost, and allocates
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entity. “ Thus, only direct costs must be accrued in the end of 2010: the lease termination fee $1.3 mln and the exit package for the terminated employees $3 mln. Cost of dismantling the old equipment should not be accrued as a restructuring cost because there is no legal liability to do so, and it was not the practice of Pharma Co to dismantle the old equipment when abandoning plant before. Therefore, this is not a cost necessary entailed by the restructuring. The costs of moving and retraining the
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to calculate insourcing and outsourcing costs on a per-unit basis. One objective of this case is to familiarize participants with the idea of total cost, and to become accustomed to allocating costs on a per unit basis. Total cost per unit cost allocation allows valid comparisons between insourcing and outsourcing options. INSOURCING COSTS Direct Materials Costs When calculating direct material costs, the key numbers involve last year's production, the cost per 50 lb. block, and the average semi-finished
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According to CIMA terminology, “a budget is defined as the quantitative expression of a plan for a defined period of time. It may include planned sales volume and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows.”(CIMA Official Terminology, 2005). This in other word means the set out of a company’s objective for a period of time for an organization and it is usually conveyed in figures term. A budget has its advantages and disadvantages; they help stimulate
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management accounting practices using IFAC model. As per IFAC (1998), there are four stages of evolution of management accounting. Prakash (2013) stated that the framework is provided to explain the developement of management accounting as to promote better understanding in changes in management accounting. Four stages of evolution of the focus of management accounting are shown in the figure 1 and describes as below. Stage 1 occurs prior to 1950 where most of the companies were focusing on cost determination
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occurred to create this situation? | | A. | | The company incurred more total job costs than the amount budgeted for the job. | | B. | | The actual manufacturing overhead costs were less than the manufacturing overhead assigned to jobs. | | C. | | Estimated manufacturing overhead was less than actual manufacturing overhead costs. | | D. | | The company incurred more manufacturing overhead costs than the manufacturing overhead assigned to jobs. | | | 2) Luca Company overapplied
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