overhead cost where allocated overhead = Burden rate * # of machine hours used by A Disadvantage: Assumes that all products consume direct labor (or other driver) and overhead in the same proportion. Two-stage allocation system and Product Costing Overhead costs are divided into different cost pools. Each cost pool has a cost driver (allocation base). * Split manufacturing overhead into more than one cost pool (e.g. create 2 cost pools whose costs add up to total manufacturing overhead
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the numbers. We will specifically focus on the following topics: understanding cost behavior‚ activity-based costing‚ variance analysis‚ budgeting‚ the balanced scorecard‚ transfer pricing‚ and performance measurement. Collectively‚ this analysis should provide a broad basis for understanding the comprehensive role of management accounting. Class Grading Grades for the course will be assigned based on the following weighting for course requirements: Points Group
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ABC Exercises 1. ABC versus traditional costing. Euro Tech Corporation produces two types of audio cassettes: standard and high-grade. The standard cassettes are used primarily in answering machines and are designed for durability rather than accurate sound reproduction. The company only recently began producing the higher-quality‚ high-grade model to enter the lucrative music-recording market. Since the new product was introduced‚ profits have been steadily declining‚ although sales of the high-grade
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THE UNIVERSITY OF TEXAS AT SAN ANTONIO PRINCIPLES OF ACCOUNTING II ACC 2033 – SPRING 2013 SYLLABUS Instructor | Adrian Wong‚ Ph.D. | Email | adrian.wongboren@utsa.edu | Phone | 210-458-8750 | Office | BB 4.06.28 | Class Time | Sec 005: 2:00 pm – 3:15 pm / TR Sec 901: 8:00 pm – 9:15 am / TRSec 004: 11:00 am–12:15 pm / TR(Class in Spanish) | Office Hrs | 12:30 pm – 2:00 pm / TR | Course Files | https://bb.utsa.edu | Room | Sec 005: TBA Sec 901: TBASec 004: TBA | Prerequisites | ACC
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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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