Accounting, Cost 14e (Horngren/Datar/Rajan) Chapter 5 Activity-Based Costing and Activity-Based Management Objective 5. 1 1) If products are different, then for costing purposes: A) an ABC costing system will yield more accurate cost numbers B) a simple costing system should be used C) a single indirect-cost rate should be used D) none of the above Answer: A Diff: 1 Terms: activity-based costing (ABC) Objective: 1 AACSB: Reflective thinking 2) Overcosting a particular product may result in: A)
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products, price and investments. [C4] | | |Prepare and produce a budget, understand chain processes and apply the said techniques. [P4] | | |Utilise strategic costing, understand and implement ways to review inventory and quality, and
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[pic] Managerial Accounting BA3201 |Puganeswary Thirumalai Naidu |307254805 |BABHM | |Tan Lian Ping |11001200428010 |BABHM | |Yasmin Lim Binti Mohd.Arifin
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| |Increase in global competition is changing |Sky’s the limit should have a flatter |Sky’s the limit should follow activity-based | |the business environment as trade barriers |organizational structure in order to adjust |costing system because it will result in more| |fall and manufacturing cost of balloons will |as per changing business environment. For |accurate product cost, labor cost etc. This | |decrease due to increase in product demand, |e.g. Sky’s the limit
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of one product subsidizing another. ABC is based on George Staubus' Activity Costing and Input-Output Accounting.[4] The concepts of ABC were developed in the manufacturing sector of the United States during the 1970s and 1980s. During this time, the Consortium for Advanced Management-International, now known simply as CAM-I, provided a formative role for studying and formalizing the principles that have become more formally known as Activity-Based Costing.[5] Robin Cooper and Robert S. Kaplan
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80 per part | Assembly & Inspection | $ 5 000 000 | Direct labor hours | $ 25.00 per hour | Units Produced | Direct Materials Costs | Number of Parts Used | Direct Labor Hours | 3 800 | $ 142 000 | 83 600 | 17 180 | Question a: ABC Costing Activity | Total Time | Cost-Driver Rate | Total Cost | Material Handling | 83 600 | $ 0.25 | $ 20 900 | Cutting & Lathe Work | 83 600 | $ 1.80 | $ 150 480 | Assembly & Inspection | 17 180 | $ 25.00 | $ 429 500 | Total | | |
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to present a comparison of the profits of E-Commerce consulting and Information Systems consulting lines of DBS Consulting Services, using the Activity-Based Costing system (ABC) and the conventional costing system based on computing hours. ABC provides more detailed and accurate information than the conventional costing system because ABC is based on consumption of resources by production of a product or service line and focuses on the activities that drive costs, recognising that activities consume
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Chapter 8 Activity-based costing Problems with conventional product costing systems General features of conventional product costing systems Direct material and direct labour costs are traced to products Manufacturing overhead costs are allocated to products using a predetermined overhead rate Manufacturing overhead rate is calculated using some measure of production volume Non-manufacturing costs are not assigned to products
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Walter W.E chung |Extent of implementation of ABC |Books |The ratio of adopting ABC | | |system |use of data of different |How do firms consider ABC system | |Activity based costing in |Earlier experience of ABC system |survey |CIMA research on ABC system | |manufacturing: |ABC implementation case studies |Journals
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new controller of Zauner ornaments, decided to research Zauner’s current costing methods. She approached her senior analyst, Yung Chen, to prepare an analysis of unit-product costs for each of Zauner’s products, namely small glass ball ornaments, large glass ball ornaments, and specialty glass ball ornaments. Using information from the sales department, Chen calculated the cost per box using traditional volume-based costing system and as a result, small glass ornaments’ cost is more than twice higher
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