company has grouped its overheads into 5 cost items, as below: Machine-related expenses Setup labor cost Receiving and production control Engineering Packaging and shipment Current Method - Volume Based Costing As per the given information, Wilkerson uses volume based costing system. Direct material and labor costs are based standard prices. Overheads are charged as 300% of the direct labor cost. This implies overheads are applied directly in relation to labor costs irrespective of relevance. Table 1
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each of the LPI’s contracted distribution centres through rail and truck. The total cost of this whole process is $24,439 per week, or $1,270,815 per year. Currently, a new supplier based in Montreal has been identified as a comparable alternative to the India supplier. The Montreal supplier offers the same product with $8.10 higher unit price. But the transportation costs are significant lower, as it only costs LPI $11,000 per week and $572,000 per year. One thing to note is that, the Montreal
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Under Creative Commons License: Attribution The traditional methods of cost allocation, cost apportionment and absorption into products are being challenged by some writers who claim that much information given to management is misleading when these methods of dealing with fixed overheads are used to determine product costs. You are required to explain what is meant by cost allocation, cost apportionment and absorption and to describe briefly the alternative approach
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manufacturing costs to a product. It can be used in other ways to determine cost effectiveness, profitability for services rendered and how to estimate per hour billing rates. First some definitions: Standard costing – this is the more traditional way of applying overhead costs to products. Anything in the manufacturing process that can’t be easily and directly tied to each product is lumped into manufacturing overhead. To insure products are appropriately prices and accounting for in COGS
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costing, all of the following statements are correct with respect to labor time and cost except: C. A machine operator performing routine annual maintenance work on a piece of equipment would charge the maintenance time to a specific job. Those hours should be charged to overhead 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? B. A costume maker that makes specialty costumes
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particularly the company’s cost accounting system and other methods. In order to meet its profit objectives and other ends, a specific cost accounting system is necessary for its budgets, and other management and accounting reports needed. STATEMENT OF THE PROBLEM S.W.O.T. ANALYSIS | |Strengths |Weaknesses | | |Cost items, its balances and
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Number 3 121 Cost Accounting In Auto Manufacturing Companies In Germany And The United States Robert Jinkens, USA RamMohan R. Yallapragada, Fayetteville State University, USA ABSTRACT Corporate accountants are mandated to prepare and distribute financial accounting reports for external U.S.ers at end of each accounting period. However, there are no similar statutory requirements for corporate accountants to provide managers of their companies with the management accounting information necessary
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University of Phoenix Course: Acc/543 Managerial Accounting and Legal Aspects of Business Course Instructor: Professor Squirrel Flexible Budgets Introduction The flexible budget is useful for cash forecasting because it is based upon the estimation of a variety of activity volumes. The usefulness of a flexible budget is founded in the ability to compare potential level of performance to the expected level. It is also a better representation of the actual fluctuations that occur in
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Included in this report is the brief overview of three separate companies who may utilize job-order costing systems. The three companies looked at are Nortech Systems, Dynamic Material Corporation and Globecomm. You will see that each of these companies has unique offerings and provides multiple products to multiple industries. The first company that apparently uses job-order costing systems is Nortech Systems, Inc. Their website is http://www.nortechsys.com and a brief summary of their services
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a single cost pool could not provide such detailed information and therefore could not meet the expectation of the management. Another important factor to be considered is that as expensive equipment were introduced for automated tests, direct labors were reduced, creating a gap between a higher depreciation expense and the less direct labor to absorb it. It is common for a cost system to become obsolete when the process experiences increased automation. 2. Calculate the reported costs of the five
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