wholesale distributors. It has just completed packaging an order from Hawes Company for 450 printers. Before the order is shipped, the controller wants to compare the unit costs computed under the company’s new activity-based costing system with the unit costs computed under its traditional costing system. Printware’s traditional costing system assigned overhead costs at a rate of 240 percent of direct labor cost. Data for the Hawes order are as follows: direct materials, $17,552; purchased parts
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Week 4: Costing Methods The week four individual paper addresses the implementation of Activity Based Costing (ABC) by Super Bakery, Inc., a virtual corporation founded by Franco Harris. Specifically, management strategies, the reasoning behind an ABC system, and the alternatives of a job order cost system or a process order cost system are assessed for this enterprise. Management Strategies A virtual corporation is described as a technology-linked network of companies, suppliers, and customers
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Ch 4: "Job Costing" A. Ch 4 Learning Objective 1: Describe the building-block concepts of costing systems. 1. LO 4-1 overview: The building-block concepts of a costing system are cost object, direct costs of a cost object, indirect costs of a cost object, cost pool, and cost allocation base. Costing systems should report cost numbers that reflect the way chosen cost objects, such as products or services, use the resources of the organization. 2. Study
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Session 9 – Cost Allocations and Activity-Based Costing Dr. Othman Cole othman.cole@faculty.hult.edu 1 Absorption Costing In absorption costing, all manufacturing costs, both fixed and variable, are assigned to units of product. Units are said to fully absorb manufacturing costs. Most countries require some form of absorption costing for both external financial reports and for tax reports. Also, most companies across the world use absorption costing in their management reports. It is the most
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office equipment used by the sales staff Salary of the company president 4. (TCO 2) An allocation base is (Points: 4) a common characteristic that jobs share, which is used to spread the overhead costs among the various jobs. the minimum amount of overhead assigned to a job. used to determine how many labor hours were needed to complete a job. used to authorize the release of materials from the storeroom to the production area. 5. (TCO 3) Why do we compute equivalent units differently
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Running Head: PUBLIX CMT Contemporary Management Technique for Publix Target Costing Rationale Publix Super Markets, Inc. is a primarily Florida established grocery store chain which employees over 120,000. Currently, Publix serves over one million customers each day and is also one of the largest employee-owned businesses in the world. Moreover, the company is one of Florida’s leading supermarkets and has tailored to most cultural trends in the grocery industry-organic foods; health
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E15-4 Analyze costs of manufacturing and determine missing amounts. (LO 2, 6), AN Manufacturing cost data for Orlando Company, which uses a job order cost system, are presented below. Case A Case B Case C Direct materials used $ (a) $ 83,000 $ 63,150 Direct labor 50,000 140,000 (h) Manufacturing overhead applied 42,500 (d) (i) Total manufacturing costs 145,650 (e) 213,000 Work in process 1/1/14 (b) 15,500 18,000 Total cost of work in process 201,500 (f) (j) Work in
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expenses ($125,000) – income tax expense ($18,000) = $42,000 2. (7 points) Brickman Corporation, which began operations on January 1 of the current year, reported the following information: Brickman applies manufacturing overhead to jobs on
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Activity-Based Costing is also known as ‘ABC’ costing has a simple concept. In contrast to traditional costing system, Activity-Based Costing system first accumulates overheads costs for each organizational activity, and then assigns the costs of the activities to the products, services, or customers. Let’s take a look back in time, during the 1970’s and 1980’s, the boundaries of absorption costing system were felt with firmness which meant they were not as complex. Companies needed something different
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characteristics and purposes of cost accounting What is Job order costing? What is Process costing? What are the four steps in the Job order flow of costs? Know how to prepare journal entries to record the purchase of raw materials, factory labor costs incurred, manufacturing overhead incurred, the assignment of direct materials, direct labor and manufacturing overhead to jobs during the month, assignment to finished goods and cost of goods sold. How does the job cost sheet help in accumulating manufacturing
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