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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Unfortunately‚ this has brought the gross margin for pumps DOWN (below 20%). Wilkerson Company’s competitive situation is to continue competing in the manufacturing of pumps while meeting planned gross margins of 35%. Wilkerson needs accurate product costing to achieve gross margin goals as well as support both the internal and external shareholders that depend on this information. Wilkerson has defined goals for gross margins and in order to hit these‚ they need to understand their production cost and
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and strategies. III. Course Learning Outcomes (CLOs): On completion of this course‚ students should be able to: 1. Students should develop a basic understanding of managerial accounting concepts such as cost‐volume‐profit‚ budgeting‚ product costing and cost behaviors. 2. Students should be able to generate and use cost information when making pricing and resource allocation decisions. 3. Students should
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1. Unit based costing first assigns overhead costs to departmental pools and then assigns these costs to products using predetermined overhead rates. a. True b. False ANSWER: True 2. Management information systems can be divided into a unit-based type and activity-based type. a. True b. False ANSWER: True 3. Predetermined overhead rates are calculated at the end of each year using the formula: overhead rate = budgeted annual driver level/budgeted annual driver level. a. True b. False ANSWER:
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and delivery process‚ and deficiencies in cash flows. For Dakota Office Products (DOP)‚ its existing costing system was inadequate because it is incapable of accounting for even all of the known costs such as the desktop delivery service as well as hidden costs such as the ten percent DOP paid to maintain its working capital line of credit for accounts receivable. Using the Activity Based Costing(ABC) methodology can be utilized to also improve processes and identify opportunities to improve business
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Activity-based Costing (ABC) and Activitybased Management (ABM) Implementation – Is This the Solution for Organizations to Gain Profitability? Authors*: Ildikó Réka CARDOŞ‚ Ştefan PETE A bstract. Adherents of ABC/ABM systems claimed traditional management accounting systems generated misleading costs in a contemporary‚ tumultuous‚ often changing business environment and implementing ABC/ABM would remedy this. That is why activity-based costing (ABC) and activity-based management (ABM)
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but customers are price-conscious as well. Data for the 20x5 budget include manufacturing overhead of $12‚000‚000‚ which has been allocated on the basis of each product’s direct-labor cost. The budgeted direct-labor cost for 20x5 totals $1‚200‚000. Based on the sales budget and raw-material budget‚ purchases and use of raw materials (mostly coffee beans) will total $5‚800‚000. The expected prime costs for one-pound bags of two of the company’s products are as follows: |
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