1 In the past‚ the Larry’s Lawnmowers Ltd. (LLL) allocated indirect manufacturing costs based on direct labour hours. Recently‚ management has decided to pilot a system of time-driven activity-based costing to allocate these costs. The division produces two lawnmower models: Lo-cost and Deluxe. The following information has been obtained from the company’s records over the past year: Lo-cost Deluxe Units produced 500‚000 50‚000 Direct labour hours incurred 200‚000 40‚000 Inspections
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1. If Wilkerson were to cut prices‚ based on contribution margin‚ to just cover short-term variable costs‚ what consequences could it experience? (5 marks) Several break-even-point assumptions are made in calculation: 1) Total fixed costs do not change with volume‚ and will exist regardless if the products are sold or not. 2) Sales mix will be constant. The contribution-margin percentage is 66.1%‚ which means 66.1 percent of each sales dollar is available for covering fixed costs and making
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customers have switched to this method for the convenience but Dakota’s costs have continued to rise. John sent Melissa and Tim into the field to get a clearer picture of the company’s activities and costs. Melissa and Tim met
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ACCT 350—TENTATIVE SCHEDULE—Spring 2015 DATE TOPICS/CLASS WORK HOMEWORK 1-14 Course Introduction Chapter 2: Basic Cost Management Concepts 1-21 Chapter 2 continued Chapter 4: Activity-Based Costing Read Chapters 2 and 4 Ch 2: 28‚ 32‚ and 33 Ch 4: 28 and 29 1-28 Chapter 4 continued Chapter 7: Allocating Costs of Support Departments and Joint Products Introduce Time-Driven ABC article and Kemps LLC case Read Chapter 7 Ch 4: 30‚ 32‚ and 33 Ch 7: 7‚ 8‚ 9‚ 12‚ 20‚ 21‚ and 34 2-4 Chapter 7 continued
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making in business practice. By the end of the class‚ you should be able to achieve the following learning goals: (1) classify various costs in the manufacturing process; (2) understand job-order costing process; (3) grasp the cost-volume-profit relations; (4) differentiate between different costing methods; (5) perform profit planning and (6) calculate turnover‚ margin and return on investments. Course Success In order to succeed to your satisfaction in this class‚ you are expected to devote
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in UAE and then choose only one of the following topics to analysis and write in regard to that company for purpose of the assignment. 1. How are the management accounting departments effective in planning‚ controlling‚ and decision making activities in UAE companies? 2. How do management accountants (MAs) in UAE analyze and classify different types of costs into fixed‚ variable‚ relevant‚ irrelevant‚ committed‚ discretionary‚ direct vs. indirect‚ avoidable vs. non-avoidable costs and apply
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Name of student:_________________ 9 Activity-Based Costing Review Question Answers 9-4 It will require more work. Significant amounts of indirect costs are allocated using only one or two cost pools. All or most costs are identified as output unit-level costs. Products make diverse demands on resources because of differences in volume‚ process steps‚ batch size‚ or complexity. Products that a company is well suited to make and sell show small profits while products for which a company is
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Critically discuss to what extent Porter’s Diamond is a useful concept in explaining home and host location strategies of international business? Illustrate your answer with reference to at least two case companies. The main aim of International business is to build and sustain competitiveness for economic value creation in both domestic and overseas markets (Besanko et al. 2007). Internalization business theory however has a variety of models that can identify the environmental analysis of specific
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absorption costing method and‚ ii. Activity Based Costing (ABC) Classification of overheads Overheads can be classified as production or non production overheads. Production overheads are those incurred in the production departments or production support departments. Non production overheads pose no problem as they are written off in the profit and loss account as period costs. The task is that of chagrining production overheads to cost units. A Traditional absorption costing method This
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Allocation of Fixed Costs ACC 403 Principles of Accounting The articles describe two different approaches: Lean accounting and activity based costing. Both have pros and cons and the selection of "what is best for allocating IT" likely rests with the culture and types of businesses. I personally believe that activity-based costing‚ which essentially casts IT as a variable cost‚ making users sensitive to the requests they make of IT because every request is an incremental cost to their
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