activity based costing questions and solutions pdf

Activity Based Costing Questions And Solutions Pdf

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Question: Suppose the managers at SailRite Company decide that the benefits of implementing an activity-based costing system would exceed the cost, and thus the company should use activity-based costing to allocate overhead. What are the five steps of activity-based costing, and how would this method work for SailRite? Answer: Activity-based costing ABC A method of costing that uses several cost pools, and therefore several predetermined overhead rates, organized by activity to allocate overhead costs.

1. ABC COSTING with answers.pdf

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No Downloads. Views Total views. Actions Shares. No notes for slide. In such situations, managers need to consider a new overhead cost allocation method that uses multiple bases.

That method is activity- based costing. This shift results in more accurate costing for two reasons: 1. Low-volume products often require more special handling, such as more machine setups and inspections, than high-volume products. Thus, the low-volume product frequently is responsible for more overhead costs per unit than is a high-volume product.

Assigning overhead using ABC will usually increase the cost per unit for low-volume products. Therefore, a traditional overhead allocation such as direct labor hours is usually a poor cost driver for assigning overhead costs to low-volume products. As a result, for Bowyer, one of the products Product RX3 may have been low volume and therefore may have more overhead costs assigned to it under an ABC system.

True 2. False 3. False 4. True 5. True DO IT! On a per unit basis, the overhead assigned to AD is close to six times that assigned to each BC DO IT! NVA 2. NVA 4. NVA 5. By using this system, more accurate cost information is developed which should lead to better allocation of resources and pricing decisions in the future. By using this system, more accurate cost information is developed which should lead to better allocations of resources and more informative pricing decisions in the future.

Hiring and training personnel Maintenance and repairs 2. Purchasing supplies and materials Delivery 3. Selling, promoting, and marketing Accounting 4. Billing and collecting 5. Designing 6. Offset printing 7. Copying 8. Faxing 9. Collating Cutting and folding Labor hours Labor hours Labor hours Gallons of chemicals Number of cartfuls or labor hours Number of cartfuls Gallons of juice Gallons of juice 9.

Gallons of wine or months of aging Number of bottles Number of bottles Number of boxes Number of shipments Number of gallons processed Number of gallons processed Number of engineering change orders; hours of designing 2. Number of orders processed 3. Number of parts in stock 4. Weight of material; number of boxes or cartons 5. Employee turnover; number of employees hired 6. Machine hours; direct labor hours 7. Number of employees; number of parts; direct labor hours 8. Number of employees 9.

Book or market value of assets Cost of goods manufactured, direct labor hours; number of employees Machine hours; number of machines Overhead costs are assigned to products based on cost drivers that measure the activities performed on the product. The primary benefit of ABC is more accurate and meaningful product costing. This improved cost data can lead to reduced costs as managers become more aware of the underlying causes of cost incurrence.

Thus, control over costs is enhanced. The improved cost data should also lead to better management decisions. More accurate product costing should contribute to setting selling prices which will help achieve desired profitability levels. In addition, it should be helpful in deciding whether to make or buy a product part or component, and sometimes even whether to eliminate a product. That is a It is assumed that any activity which directly enhances or improves the quality or quantity of the vines, grapes, or wine is a value-added activity.

Research may be value-added if it is unique, related to a specific case, and is billable. Research may be non-value-added if it is something the attorney should already have known and is not billable to the client. Facility-level activity 2. Product-level activity 3. Batch-level activity 4. Product-level activity 5. Product-level activity 6. Batch-level activity 7. Facility-level activity 8.

Batch-level or unit-level activity 9. Unit-level activity These distorted overhead assignments have likely led to overpricing the home model and underpricing the commercial model. If any product should be phased out, it is the Majestic. But, by applying ABC and activity-based management analysis, Overton may determine how to reduce the costs of producing the Majestic model. Activity-based costing is the preferable costing system for setting prices because the real costs are more accurately reflected.

Activity-based costing (ABC)

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Activity-Based Costing. Solutions to Review Questions. Give examples of cost drivers commonly used to allocate overhead costs to products and services.


CHAPTER 5 Activity-Based Costing and Cost Management Systems ANSWERS TO REVIEW QUESTIONS

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f5 abc costing questions

Выйдя на открытое место и бросив взгляд на корчащегося на земле Танкадо, он задвигал пальцами, словно исполнял ими какой-то причудливый танец над коробочкой, которую держал в руке. - Он работает на Монокле, - пояснил Смит.  - Посылает сообщение о том, что Танкадо ликвидирован. Сьюзан повернулась к Беккеру и усмехнулась: - Похоже, у этого Халохота дурная привычка сообщать об убийстве, когда жертва еще дышит. Камера последовала за Халохотом, двинувшимся в направлении жертвы. Внезапно откуда-то появился пожилой человек, подбежал к Танкадо и опустился возле него на колени.

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Сердце у Сьюзан бешено забилось. Правильно ли она поняла. Все сказанное было вполне в духе Грега Хейла. Но это невозможно. Если бы Хейлу был известен план Стратмора выпустить модифицированную версию Цифровой крепости, он дождался бы, когда ею начнет пользоваться весь мир, и только тогда взорвал бы свою бомбу, пока все доказательства были бы в его руках. Сьюзан представила себе газетный заголовок: КРИПТОГРАФ ГРЕГ ХЕЙЛ РАСКРЫВАЕТ СЕКРЕТНЫЙ ПЛАН ПРАВИТЕЛЬСТВА ВЗЯТЬ ПОД КОНТРОЛЬ ГЛОБАЛЬНУЮ ИНФОРМАЦИЮ. Что же, это очередной Попрыгунчик.

5 comments

Becumasla1994

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Catherine S.

The unit cost for product A is 16% higher under ABC as opposed to traditional absorption costing. Under ABC, it is $7·76 per unit compared to $6·71 under.

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Ciptheolinan1993

Steps in Activity-Based Costing 3.

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Megan H.

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DiГіgenes O.

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