Limited. Standard Costs Predetermined. Standard Costs are Used for planning labour, material and overhead requirements. Benchmarks for measuring performance. Used to simplify the accounting system. © 2008 McGraw-Hill Ryerson Limited. Standard Costs Managers focus on quantities and costs that exceed standards, a practice known as management by exception. Amount Standard Direct Material Direct Labour Manufacturing Overhead Type of Product Cost © 2008 McGraw-Hill Ryerson
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Direct Cost November 27, 2011 Direct labor cost is the prices charged for the production of specific goods or services. Direct costs refer to materials, labor and expenses related to the production of a product. Direct labor is labor directly associated with the work being produced (Murphy, p. 98). Other direct labor is labor readily identifiable with a particular objective such as a contract and labor important enough to warrant identifying and measuring so we can keep up with its cost (Murphy
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4-1 Traditional cost accounting systems assign operating expenses to products with a two-stage procedure: 1. expenses are assigned to production departments; 2. production department expenses are assigned to the products Departmental structure influences the first stage allocation process. Production Departments refer to departments that have direct responsibility for converting raw materials into finished products. Service departments perform activities that support production such
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address those benefits as well as the potential drawbacks of such mentioned allocations, and if traditional cost accounting or activity based costing (ABC) would prove more relevant. ABC is being used in today’s businesses more often as it is an important aspect of manufacturing organizations, based on a “methodology that measures the cost and performance of activities, resources and cost objects” (Akyol, Tuncel, and Bayhan, 2005). So many factors go into the calculations of activity based costing
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ACCTG 404: Managerial Accounting sections 001, 002, 003 Spring 2012 Instructor: Benjamin Lansford, Ph.D. Office: 325 Business Building E-mail: lansford@psu.edu Office Hours: Fridays 1:30 pm – 4:30 pm, and by appointment TA: Chase Livengood Office: 305A Business Building E-mail: ctl5040@psu.edu Office Hours: Wednesdays 12:15 pm – 3:15 pm I. Course Objectives This course emphasizes the
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currently being used in the Chicago plant. G.G. Toys should change its existing cost accounting system from traditional costing to activity-based costing because it is calculating its manufacturing overhead on only one cost, direct labour. Since overhead at the Chicago plant is high, the cost accounting system must be accurate. Different types of dolls require different amounts of machine hours and other variable costs. By using Activity-based costing, each doll would have a different manufacturing
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Direct Costs: $1 000,000 / 400 surgeries performed = $2,500/surgery Transplants: 2,500 x 50= $125,000 Valve Replacements = 2,500 x 1,000 = $250,000 Bypass = 2,500 x 250 = $625,000 Indirect Costs: Medical Salaries: $5,000,000/10,000 hours = $500 per hour Transplants: 500 x 2,000 = $1,000,000 Valve Replacements: 500 x 3,000 = $1,500,000 Bypass: 500 x 5,000 = $2,500,000 1. Building Maintenance: $1,000,000/50,000 = $20 per square foot Transplants: 20 x 30,000 = $600,000 Valve Replacements:
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Costing Managerial accounting is made up of different forms of accounting. This week was focused on cost accounting and the two different forms of cost accounting, job and process costing. According to Albert Galway, cost accounting, in general, involves determining the costs for different areas of a firm (1991). Depending on the firm, one may find a job costing system more important as where another firm may be able to utilize a process costing system to allocated costs. Stephen did a very good
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ACCOUNTING 603 FALL 2012 Tijuana Bronze Machining (TBM) As time goes by, it becomes clear to me that our competitors are crazy. Pumps are a major product in a big market for all of us, but with the prevailing price cutting mentality no one will be able to sell pumps profitably as long as we all are forced to match each other’s lower prices. I guess we should be grateful that competitors don’t play the same foolish game in valves and flow controllers. Even with the 12 ½% price increase, we
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Chelsea Ginsberg 02/22/13 ACCT2301 South Dakota Microbrewery Case 1. Prepare a complete product cost estimate for Buffalo Ale, Bismark Bock an Four Heads Stout (see Exhibit 4) using: a. The plant-wide allocation based on direct-labor hours b. An activity-based cost system Activity rates: Cost estimate based on activity rates: 2. For each costing method, what is the gross margin per batch for each beer label, in dollars? What is the gross margin percentage? What is the total
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