Palmolive is an America based company and has many branches all over the world. One of the branches is located in Malaysia. Colgate- Palmolive (M) Sdn Bhd focusing their product segment on toothpaste and toothbrush. Both products are very competitive presently in Malaysia market. At the present‚ Colgate is implementing Activity-Based Costing (ABC) method. ABC is a system had been practices in many organizations for being a tool to measures the cost and performance of the activities and the cost objects
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Assignment 1 Upside Down‚ Incorporated designs custom storage spaces to eliminate clutter in both residential and business settings. The following data pertain to a recent reporting period. Requirements a. Use ABC to compute overhead rates for each activity. b. Assign costs to a 3‚000 square foot job that requires 70 contact hours‚ 20 design hours‚ and 14 days to complete. a. Client Consultation: $100‚000/500 contact hours=$200 per contact hr Drawings: $75‚000/1‚000 design hours=$75 per design hr Models:
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In traditional approach‚ the exact cost of products or services is probably impossible to determine. The use of direct labor as the activity base made sense when overhead cost allocation systems were first developed. At that time direct labor made up a large portion of total manufacturing cost. Therefore‚ it was widely accepted that there was a high correlation between direct labor and the incurrence of overhead cost. As a result‚ direct labor became the most popular basis for allocating overhead
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what fundamental ways does activity-based costing differ from traditional costing methods such as job-order costing as described in Chapter 3? a) Nonmanufacturing as well as manufacturing costs may be assigned to products‚ but only on a cause-and-effects basis. b) Some manufacturing costs may be excluded from product costs. c) Numerous overhead cost pools are used‚ each of which is allocated to products and other cost objects using its own unique measure of activity. 7-2 Why is direct labor
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level of activity (p.385)” Robert is using a budgeted level of activity and comparing it to the actual level of activity as the basis for the evaluations. The information that is received from an evaluation done in this manner is going to be misleading. The budgeted level of activity is not always going to be the same as the actual level of activity‚ so a true comparison is impossible. For example my company manufactures safety belts for motor vehicles and the budget is based on an activity level
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Problem 5-33 First-stage allocation‚ activity-based costing‚ manufacturing sector Overhead Costs: Wages & Salaries Depreciation Rent Other O/H Total O/H Cost $ $ Direct Mfg. Labor Support Wages & Salaries $ 192‚000 Depreciation 15‚000 Rent 36‚000 Other O/H 48‚000 Total O/H Cost $ 291‚000 Activity Rate $ 9.70 Traditional $ 9.70 Order 448200: Direct Mfg. Labor Order Process Design Support Other Direct Materials Direct Labor Direct labor rate/hour Activity Cost Pool Drct Mfg. Labor Order Process
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budget includes estimated manufacturing overhead cost of $3‚000‚000. CBI assigns manufacturing overhead to products on the basis of direct labor-hours. The expected direct labor cost totals $600‚000‚ which represents 50‚000 hours of direct labor time. Based on the sales budget and expected raw materials costs‚ the company will purchase and use $6‚000‚000 of raw materials (mostly coffee beans) during the year. The expected costs for direct materials and direct labor for one-pound bags of two of the company’s
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Case 5 – 69 1.0 Compute the target prices for the three models‚ based on the traditional‚ volume-based product costing system. The volume based product costing system comprises the total product cost multiplied by a target selling price. The target selling price in a volume based product costing system can differ from an activity based product costing system because of the way the manufacturing overhead costs are lumped together and applied on the basis of direct-labour hours over all three products
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School of Business Department of Accounting and Finance Course Name: Managerial Accounting Course Code & Section No: ACT202 Section: 18 Semester: Fall 2014 Instructor & Department Information 1. Instructor Name: Syed Asif Hossain 2. Office Room NAC 737 3. Office Hours: ST 1:30 - 3:30; MW 10:30 - 12:30; Thursdays By Appointment 4. Office Phone: 5. Email Address: asif.nsubus@gmail.com 6. Department: Accounting and Finance 7. Links Google Drive: https://drive.google.com/folderview?id=0B1JHAN5MllM5WUszSWZ0d3JmRDg&usp=drive_web
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like to utilize the Activity Based Costing (ABC) approach to analyze the high customer distribution and costs to determine which types of companies they should pursue for expansion. In order to determine if the CEO is right in his contribution margin based assumption as well as and in an effort to allocate customer support and distribution costs‚ I have been hired as an consultant to prepare segment income statements that allocate based on revenues and the other on activities. Income Statements
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