report. 2 Report on the Reason of Why the Companies Should Implement ABC Rather than Traditional Cost System Executive Summary Activity-based costing provides a more accurate method of product/service costing‚ leading to more accurate pricing decisions. It increases understanding of overheads and cost drivers; and makes costly and non-value adding activities more visible‚ allowing managers to reduce or eliminate them. ABC enables effective challenge of operating costs to find better ways
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Accounting……………………………………………………………………03 Introduction……………………………………………………………………………………..03 Traditional costing v/s activity based costing…………………………………………………..04 Need for an Activity Based Costing……………………………………………………………06 Stages in Activity Based Costing……………………………………………………………....08 Cost Drivers…………………………………………………………………………………….09 Classification of activities………………………………………………………………...……10 Steps Involved in the Implementation of Activity Based Costing……………………………..11 Working Example……………………………………………………………………………...13 ABC and the
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TASK 1 (Be able to apply cost concepts to the decision-making process) comprise the following aspects: ➢ Generally speaking‚ Pricing strategies are of two generic types: costs-based and Market-oriented. Whereas cost-plus approaches to pricing are proactive‚ in that prices are largely determined by the organisation’s financial performance objectives‚ market-oriented approaches are reactive to market conditions and are shaped by
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Question 1: Compute the full production cost (per gallon) of the Polynesian Fantasy and Vanilla products using a) Will’s old costing method; b) The new costing method. 1 1a) Based on Will’s old costing method (Volume Based Costing): • California Creamery has a budgeted manufacturing overhead of $600‚000 and a budgeted direct labour cost of $300‚000 • Overhead rate per direct labour cost => $600‚000/$300‚000 = $2 From Exhibit 2 CALIFORNIA CREAMERY‚ INC. Two Product Examples (2004 Data) Polynesian
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1) A well-designed activity-based costing system starts with __________. A. analyzing the activities performed to manufacture a product B. assigning manufacturing overhead costs for each activity cost pool to products C. computing the activity-based overhead rate D. identifying the activity-cost pools 2) "Generally accepted" in the phrase generally accepted accounting principles means that the principles __________. A. have been approved for use by the managements of business
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Super Bakery Costing Methods Learning Team D Acc 561 Super Bakery Costing Methods Super Bakery is a virtual company‚ in this company many things go on‚ but it only deals with the core functions of the industry when the other portions of the company are contracted out. Since the bakery is a leader when it comes to the institutional baked goods market‚ the business may have ongoing concerns maintaining the quality of its goods and services. The Super Bakery management department agree
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sentence true? Manufacturing companies that benefit the most from activity-based costing are those where overhead costs are a _________ percentage of total product cost and where there is ___________ diversity among the various products that they produce. A) low‚ little B) low‚ considerable C) high‚ little D) high‚ considerable 17. Would factory security and assembly activities be best classified at an appliance manufacturing plant as unit-level
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best answer and fill-in the corresponding circle on your Scantron sheet. Only answers on the Scantron will be scored. 1. Managerial accounting: a. is unregulated. b. produces information that is useful only for manufacturing organizations. c. is based exclusively on historical data. d. is regulated by the Securities and Exchange Commission (SEC). 2. The accounting records of Dolphin Company revealed the following information: Dolphin’s cost of goods sold is: a. $508‚000. b. $529‚000. c. $531
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Activity-Based Overhead Rate R&D activities fall into four pools. The four activity pools are market analysis‚ product design‚ product development‚ and prototype testing. The annual costs are $1‚050‚000 for market analysis‚ $2‚350‚000 for product design‚ $3‚600‚000 for product development‚ and $1‚400‚000 for prototype testing. The total estimated drivers for each activity are 15‚000 hours of market analysis‚ 2‚500 designs‚ 90 products‚ and 500 tests. Per the computed activity-based overhead
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following managerial accounting approaches attempts to allocate manufacturing overhead in a more meaningful fashion? a. Theory of constraints b. Just-in-time inventory c. Activity-based costing d. Total quality management Week Two: Cost Allocation Objective: Assess the advantages and disadvantages of an activity-based costing system. 4. As compared to a high-volume product‚ a low-volume product a. usually requires less special handling b. is usually responsible for more overhead costs per
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