Bac203 Week 3 Assignment
BMAC5203 ASSIGNMENT
MAY SEMISTER 2013
BMAC5203 - ACCOUNTING FOR BUSINESS DECISION
MAKING 'S ASSIGNMENT
BASEM NOOR MOHAMMED
OPEN UNIVERSITY MALAYSIA, USTY CENTER
1
BMAC5203 ASSIGNMENT
TASK 1
ReebookRealflex produces shoes for circuit training and walking. Recently, the management of the company has decided to adopt the activity-based costing system and has identified three activity cost pools. Information on its annual overhead costs and the activity cost pools are as follows:
Activity cost pools (rate of consumption)
Overhead
Leather
Insole
Other
Total
costs
cutting
fabrication
Production overhead
RM240,000
35%
45%
20%
100%
Office expense
RM160,000
15%
55%
30%
100%
The “Other” …show more content…
One indicator of future costs is historical cost data. In a mature production process, where the firm has a lot of production experience, historical costs can provide a good basis for predicting future costs.
Standards based on the average of recent historical performance are the least desirable.. 2- ENGINEERING STUDIES
Engineering studies can identify efficient approaches and can provide rigorous guidelines, but engineered standards often are too rigorous. Managers also use task analysis to focus on how much a product should cost (e.g., time and motion studies). In using task analysis, the emphasis shifts from what the product did cost in the past to what it should cost in the future. The managerial accountant typically works with engineers to conduct studies in an effort to determine exactly
16
BMAC5203 ASSIGNMENT how much direct material should be required, how machinery should be used in the production process, and many direct labor hours are required.
3- INPUT FROM OPERATING PERSONNEL
Since operating personnel are accountable for meeting standards, they
MAY SEMISTER 2013
BMAC5203 - ACCOUNTING FOR BUSINESS DECISION
MAKING 'S ASSIGNMENT
BASEM NOOR MOHAMMED
OPEN UNIVERSITY MALAYSIA, USTY CENTER
1
BMAC5203 ASSIGNMENT
TASK 1
ReebookRealflex produces shoes for circuit training and walking. Recently, the management of the company has decided to adopt the activity-based costing system and has identified three activity cost pools. Information on its annual overhead costs and the activity cost pools are as follows:
Activity cost pools (rate of consumption)
Overhead
Leather
Insole
Other
Total
costs
cutting
fabrication
Production overhead
RM240,000
35%
45%
20%
100%
Office expense
RM160,000
15%
55%
30%
100%
The “Other” …show more content…
One indicator of future costs is historical cost data. In a mature production process, where the firm has a lot of production experience, historical costs can provide a good basis for predicting future costs.
Standards based on the average of recent historical performance are the least desirable.. 2- ENGINEERING STUDIES
Engineering studies can identify efficient approaches and can provide rigorous guidelines, but engineered standards often are too rigorous. Managers also use task analysis to focus on how much a product should cost (e.g., time and motion studies). In using task analysis, the emphasis shifts from what the product did cost in the past to what it should cost in the future. The managerial accountant typically works with engineers to conduct studies in an effort to determine exactly
16
BMAC5203 ASSIGNMENT how much direct material should be required, how machinery should be used in the production process, and many direct labor hours are required.
3- INPUT FROM OPERATING PERSONNEL
Since operating personnel are accountable for meeting standards, they