Topic: Product costing Ningbo lecturer: Ms. Huang HuiQin – E: huanghuiqin@nbu.edu.cn – P: 86-574-87600960 Student: Lê Uyên Phương (Phoebe) – E: leuyenphuongvn@yahoo.com – P: 86-15 757 829 310 Student ID: 1211125031 NBU Intake 12‚ 2012 Required: Examine the literature to identify the different perspectives on how a product’s cost may be formulated. Assess the strengths and weaknesses of the various approaches to product costing that have been proposed
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Q. A. 1. - Calculate the Unit Costs for Product A and B using the traditional volume-based product costing system. The Overhead costs of Duo plc have been allocated using the Traditional costing system in table 1. The Overhead costs have been allocated using Direct Labour Hours (DLH) of production (Direct Labour Hour absorption approach). That is‚ Total Overhead costs were divided by the addition of all DLHs‚ giving us the overhead rate per labour hour (£10.345). This method was used since
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Product costing assignment 1. (a) Split into fixed costs and variable costs‚ which are both allocated based on machine hours‚ but using separate rates. Also‚ make a distinction between the costs that are more directly related to the machines (e.g.‚ depreciation‚ electricity) and those that have been allocated to the machines from other cost centers. (b) Split total machine-related costs into three types: costs related to setup‚ production‚ and maintenance of the machines. For each type of
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Birmingham Bowling Ball Company (BBBC) uses a job-order costing system to accumulate manufacturing costs. The company’s work-in-process on December 31‚ 20x3‚ consisted of one job (no. 3088)‚ which was carried on the year-end balance sheet at $78‚400. There was no finished-goods inventory on this date. BBBC applies manufacturing overhead to production on the basis of direct-labor cost. Budgeted totals for 20x4 for direct labor and manufacturing overhead are $2‚100‚000 and $2‚730‚000‚ respectively
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its job cost sheet. Direct materials cost was $3‚067. A total of 30 direct labor-hours and 104 machine-hours were worked on the job. The direct labor wage rate is $12 per labor-hour. The company applies manufacturing overhead on the basis of machinehours. The predetermined overhead rate is $11 per machine-hour. The total cost for the job on its job cost sheet would be: A. $4‚571 B. $3‚757 C. $3‚090 D. $3‚427 Applied manufacturing overhead = Predetermined overhead rate x Actual machine-hours Applied
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Estimated total manufacturing costs Estimated cost allocation base = = $1‚150‚000 25‚000* direct labor hours = = $46 per direct labor hour *When calculating plantwide overhead rates‚ all direct labor hours incurred in the plant are used. (continued) E 4-22A Req. 2 Departmental overhead rate Machining Dept. overhead rate = = Finishing Dept. overhead rate Total department overhead Cost allocation base (estimated) = $825‚000 13‚750 machine hours $60 per machine
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contain or reduce costs on products and projects. The key missing pieces typically include a view across the extended enterprise with multiple disciplines; a view of lifecycle costs‚ starting with design or project engineering and moving through supply‚ production‚ distribution‚ and‚ where relevant‚ aftermarket service; customer needs balanced with costs; forward-looking cost analysis; and a means of creating visibility and accountability for those who contribute cost. Fortunately‚ cost management software
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1. Indirect labor is a part of: B. Conversion cost. Labor that cannot be physically traced to particular product is treated as indirect labor and as manufacturing overhead. Conversion cost is the sum of direct labor and manufacturing overhead. These costs are incurred to convert materials into the finished product. Indirect labor is treated as part of manufacturing overhead. 2. Prime cost and conversion cost share what common element of total cost? B. Direct labor. Prime cost is the sum of
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how travel agencies cost the services they render. Product costing is the accounting process of determining all business expenses pertaining to the creation of company products. These costs can include raw material purchases‚ worker wages‚ production transportation costs and retail stocking fees. A company uses these overall costs to plan a variety of business strategies‚ including setting product prices and developing promotional campaigns. A company also uses product costing to find ways to streamline
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Product costing systems in modern manufacturing organisations Product costing refers to the process of assigning shared direct and indirect costs to individual products‚ customers‚ branches or other cost items. (USAID‚ 2007) Product costing is also referred to as assigning costs to inventory and production based on the expenses that go into producing or buying inventory. It is an important process for manufacturers that helps improves management information on products and helps managers and the
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