ACCT 222 ( Kelvin ) WENDY’S CHILLI 1. The cost of ground beef is a joint cost. The ground beef is made into beef patties which are used first for hamburger. However, the “well-done” beef patties that cannot be served as “hot ‘n juicy” old-fashioned hamburgers will be used to make chili. At this point, the ground beef patties used for hamburgers and the ground beef patties used to chili split off and become separately identifiable. 2. Hamburgers account for 55% of Wendy’s total sale, while
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mba Monterrey team (Maria, Rocio, calixto, hector, ernesto) subject: PRODUCT COST´S ANALYSIS date: [ 8/3/2012 ] cc: dr. Jeff Schatzberg Following-up the estimates cost, we got product costs using the overhead cost activity analysis, and the estimate costs are, Valves $ 37.70 per unit, Pump $ 48.79 per unit and Flow controllers $ 100.76 per unit. Comparing standard unit cost vs the costs estimated by overhead cost activity analysis, we found that it would be losses in flow controllers of $177
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traditional cost accounting methods are misleading where there is diversity in the no of products manufactured. The case highlights the importance of Process-Oriented Costing approach. The cost structure of the firm suggests that the production related and support related overheads form 33.0 and 26.0 percent of total costs. Since the firm manufactured almost 10,000 different types of motors, allocation of support related overhead costs can be crucial for the operation of the firm. Table 1. Cost of base
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pp. 2–8. 35. S. Datar, S. L. Kulp and R. A. Lambert, “Balancing Performance Measures,” Journal of Accounting Research, 39, no. 1 (June 2001), pp. 75–92; G. A. Feltham and J. Xie, “Performance Measure Congruity and Diversity in Multi-Task Principal–Agent Relations,” The Accounting Review, 69, no. 3 (July 1994), pp. 429–53; R. A. Lambert, “Contracting Theory and Accounting,” Journal of Accounting and Economics, 32, no. 1–3 (December 2001), pp. 3 –87; and G. Baker, “The Use of Performance Measures
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Traditional cost allocationmethodologies in firms can provide misleading information about the profitability of products, product lines, customers, and markets. Activity Based Costing (ABC) attempts to create the big picture, crystal-clear, full, and accurate information in a firm. The following are some of best practices of ABC for a multinational firm: Phase One includes assessment phase that included project planning, team training, development of resource matrices, and coordination with
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III. Two Stage Cost System Analysis The two stage method is always used in Activity-Based Costing, which assigns resource costs to cost objects base on separate activities. In stage one, the total overhead costs are allocated to the separate activities base on different resource drivers. In stage two, the costs of activities are allocated to each cost object base on cost drivers. In this case, because the wages and depreciation costs can be traced directly to each workstation, we only need to
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The Goal Chapters 31 – 45 1. Give two examples from Alex’s company to illustrate the notion of “common sense is not common at all.” First, according to the cost-accounting rules that everybody has used in the past, Alex’s company is supposed to balance capacity with demand first, and then try to maintain the flow. However, instead they shouldn’t be trying to balance capacity at all; they need excess capacity. The rule they should be following is to balance the flow with demand, not the capacity
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Chapter 12 Standard Costs and Variance Analysis Solutions to Questions 12-1 A quantity standard indicates how much of an input should be used to make a unit of output. The quantity might be measured either in terms of units of direct materials or hours of direct labour time. A price standard indicates what the cost of the input should be. 12-2 Ideal standards do not allow for any imperfections or inefficiencies. Thus, ideal standards are rarely, if ever, attained. Practical standards allow
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for costing systems: * Cost object: anything for which a separate measurement of costs is desired. * Direct costs of a cost object: costs that are related to the particular cost object and can be traced to it in an economically feasible (cost-effective) way. * Indirect costs of a cost object: costs that are related to the particular cost object but cannot be traced to it in an economically feasible way. Indirect costs are allocated to the cost object using a cost-allocation method. (cf
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630 Managerial Accounting Wendy Achilles February 25, 2013 Case 5A – Glaser Health Products Glaser Health Products of Ranier Falls, Georgia needs assistance in evaluating and classifying costs in order to implement an activity-based costing system. As stated in the case, these costs will be used for planning and control decisions rather than inventory valuation. The activity-based costing system will provide better allocation of Glaser’s overhead costs rather than a system
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