This document provides an overview and outline of chapter 17 from an accounting textbook. It includes brief exercises, full exercises, problems, and critical thinking cases related to job order costing systems and overhead allocations. The brief exercises cover topics like accounting for overhead, overhead application rates, and activity-based costing. The full exercises involve understanding cost flows, overhead cost drivers, and case studies of specific companies. The problems and cases require more in-depth analysis, such as allocating overhead costs across multiple products and activity bases.
The document discusses cost allocation and its importance for decision making. Cost allocation involves identifying and assigning costs, like overhead, to products and services. There are different cost allocation methods, like step allocation and reciprocal allocation, that allocate costs between departments. Absorption costing includes both variable and fixed costs as product costs, while variable costing only includes variable costs. Proper cost allocation provides accurate cost information for decision making around pricing, costs, and resource utilization.
Nature And Theories In Management AccountingLisa Williams
This document discusses cost accounting, its role, and ethical considerations. It begins by defining cost accounting as a subset of managerial accounting that helps determine and accumulate product, process, or service costs. It then discusses the role of cost accounting in planning, decision making, and performance evaluation. Finally, it discusses some ethical issues that can arise in cost accounting, such as lack of understanding leading to manipulation, and the need to provide truthful information to users. It also briefly compares absorption and variable costing approaches.
This document discusses the implementation methodology for activity-based costing (ABC) systems. It begins with an introduction to ABC and its emergence as an alternative to traditional costing methods. It then describes research conducted implementing ABC systems in three manufacturing companies. The major findings from this research are:
1. A multi-step implementation process is required, beginning with a feasibility study and review to analyze benefits and costs.
2. The next steps involve identifying activities and cost objects in the ABC model, assigning costs to activities, and calculating activity and cost object costs.
3. Through case studies, it was found that activities cannot be defined independently of cost objects for successful ABC implementation. Both must be identified together in the
Behavioral Aspects of IT Employees towards Problems and Prospects of Activity...Dr. Amarjeet Singh
Activity Based Costing (ABC) is a new variant in cost
management practices emerged in 1980’s, which caters to the
needs of organizations in effective control and monitoring cost
and better management of profitability. The success of ABC
duly depends on articulation of implementation of ABC and
the outcome of Activity Based Cost and Management
(ABCM). Though employees experience a positive outcome, it
is beyond doubt that they can support the ABC rather
resisting the same. The main objective of this paper is to
examine the perception of IT companies’ employees’ towards
implementation of Activity-Based Costing(ABC). A normative
list of benefits concerning the ability of ABC systems to
redirect the behavior of individuals was abstracted from the
interviews opinion and compared to the perceived benefits
gathered from interviews with firm employees. This will
permit IT Companies and provides relevant information that
will enable them to make better decisions with regard to
measure the successful implementation of ABC in IT
Companies.
Activity-based costing (ABC) is an accounting method that assigns costs to specific business activities and then associates those activities with products and services. This allows businesses to determine which products, services, and resources are most profitable and which are contributing to losses. While mainly used by large companies, ABC can also benefit small businesses by helping them better understand their cost structure and justify operational changes to increase profits. Implementing ABC requires proper planning, data collection on activities and costs, and a commitment from management to act on the results.
The document discusses cost analysis and control with reference to Hero Motocorp Pvt Ltd. It defines key terms like cost, cost-benefit analysis, and the need for cost reduction strategies.
The scope of the study is restricted to analyzing Hero Motocorp's cost systems and evaluating ways to modify the current system. Data will be collected from Hero Motocorp officers, journals, accounting records, books, and statistical records.
The objectives are to provide a framework for cost and cost control analysis, examine Hero Motocorp's cost system and objectives, and evaluate and propose modifications to the existing cost system with regards to different cost types and performance cost formulation.
Management accounting provides accounting information to managers within organizations to help them make informed business decisions. It focuses on forward-looking information for decision-making, rather than historical financial reporting. Management accounting involves identifying, measuring, analyzing, and communicating financial and non-financial information about resources, risks, and performance. The goal is to help managers strategically plan, evaluate, and control operations to make efficient use of resources.
Cost management aims to plan and control project or business budgets through activities like planning, estimating, budgeting, financing, managing, and controlling costs. It covers the full project lifecycle from initial planning to measuring actual costs and completion.
Intangible costs like morale are difficult to measure, while tangible costs like materials are easy to quantify but management focuses more on tangible costs. One major tangible benefit is budgetary savings, as project managers control budgets and allocate resources to stay within or under budget. This impacts workforce productivity and determines if a project is under or over budget. Savings from project managers increase organizational returns and funds future projects.
The document discusses cost allocation and its importance for decision making. Cost allocation involves identifying and assigning costs, like overhead, to products and services. There are different cost allocation methods, like step allocation and reciprocal allocation, that allocate costs between departments. Absorption costing includes both variable and fixed costs as product costs, while variable costing only includes variable costs. Proper cost allocation provides accurate cost information for decision making around pricing, costs, and resource utilization.
Nature And Theories In Management AccountingLisa Williams
This document discusses cost accounting, its role, and ethical considerations. It begins by defining cost accounting as a subset of managerial accounting that helps determine and accumulate product, process, or service costs. It then discusses the role of cost accounting in planning, decision making, and performance evaluation. Finally, it discusses some ethical issues that can arise in cost accounting, such as lack of understanding leading to manipulation, and the need to provide truthful information to users. It also briefly compares absorption and variable costing approaches.
This document discusses the implementation methodology for activity-based costing (ABC) systems. It begins with an introduction to ABC and its emergence as an alternative to traditional costing methods. It then describes research conducted implementing ABC systems in three manufacturing companies. The major findings from this research are:
1. A multi-step implementation process is required, beginning with a feasibility study and review to analyze benefits and costs.
2. The next steps involve identifying activities and cost objects in the ABC model, assigning costs to activities, and calculating activity and cost object costs.
3. Through case studies, it was found that activities cannot be defined independently of cost objects for successful ABC implementation. Both must be identified together in the
Behavioral Aspects of IT Employees towards Problems and Prospects of Activity...Dr. Amarjeet Singh
Activity Based Costing (ABC) is a new variant in cost
management practices emerged in 1980’s, which caters to the
needs of organizations in effective control and monitoring cost
and better management of profitability. The success of ABC
duly depends on articulation of implementation of ABC and
the outcome of Activity Based Cost and Management
(ABCM). Though employees experience a positive outcome, it
is beyond doubt that they can support the ABC rather
resisting the same. The main objective of this paper is to
examine the perception of IT companies’ employees’ towards
implementation of Activity-Based Costing(ABC). A normative
list of benefits concerning the ability of ABC systems to
redirect the behavior of individuals was abstracted from the
interviews opinion and compared to the perceived benefits
gathered from interviews with firm employees. This will
permit IT Companies and provides relevant information that
will enable them to make better decisions with regard to
measure the successful implementation of ABC in IT
Companies.
Activity-based costing (ABC) is an accounting method that assigns costs to specific business activities and then associates those activities with products and services. This allows businesses to determine which products, services, and resources are most profitable and which are contributing to losses. While mainly used by large companies, ABC can also benefit small businesses by helping them better understand their cost structure and justify operational changes to increase profits. Implementing ABC requires proper planning, data collection on activities and costs, and a commitment from management to act on the results.
The document discusses cost analysis and control with reference to Hero Motocorp Pvt Ltd. It defines key terms like cost, cost-benefit analysis, and the need for cost reduction strategies.
The scope of the study is restricted to analyzing Hero Motocorp's cost systems and evaluating ways to modify the current system. Data will be collected from Hero Motocorp officers, journals, accounting records, books, and statistical records.
The objectives are to provide a framework for cost and cost control analysis, examine Hero Motocorp's cost system and objectives, and evaluate and propose modifications to the existing cost system with regards to different cost types and performance cost formulation.
Management accounting provides accounting information to managers within organizations to help them make informed business decisions. It focuses on forward-looking information for decision-making, rather than historical financial reporting. Management accounting involves identifying, measuring, analyzing, and communicating financial and non-financial information about resources, risks, and performance. The goal is to help managers strategically plan, evaluate, and control operations to make efficient use of resources.
Cost management aims to plan and control project or business budgets through activities like planning, estimating, budgeting, financing, managing, and controlling costs. It covers the full project lifecycle from initial planning to measuring actual costs and completion.
Intangible costs like morale are difficult to measure, while tangible costs like materials are easy to quantify but management focuses more on tangible costs. One major tangible benefit is budgetary savings, as project managers control budgets and allocate resources to stay within or under budget. This impacts workforce productivity and determines if a project is under or over budget. Savings from project managers increase organizational returns and funds future projects.
Evaluate Your Learning OutcomesWrite a critical evaluation o.docxturveycharlyn
Evaluate Your Learning Outcomes
Write a critical evaluation of your learning outcome. In your response, consider:
1. Your managerial accounting skills/knowledge prior to taking this class
2. Base on the course content, discuss the new skills you acquired from this class? How relevant are the new skills in your profession?
3. How would you apply your new knowledge?
Required:
1.
Post your original discussion. Read and respond to three (3) your classmates.
See the class syllabus for posting requirements.
2.
Be sure to support your work with specific citations using APA format
3.
Read a selection of your colleagues' postings using one or more of the following ways:
· Share an insight from having read your colleagues' postings, synthesizing the information to provide new perspectives.
· Offer and support an alternative perspective using readings from the class materials or from your own research.
· Validate an idea with your own experience and additional research.
· Make a suggestion based on additional evidence drawn from readings or after synthesizing multiple postings.
· Expand on your colleagues' postings by providing additional insights or contrasting perspectives based on readings and evidence.
· Return to this Discussion several times to read the responses to your initial posting. Note what you have learned and/or any insights you have gained as a result of the comments your colleagues made.
Course Description:
This course introduce students to a variety of topics related to financial and economics concepts and theories including general micro- and macroeconomics concepts, investments in different types of financial assets (stocks, bonds, options, etc.). CAPM, financing of projects, financial structure, agency theory and agency costs, corporate governance, diversification, mergers and acquisition, and asset collateralization.
Course Objectives & Learning Outcomes
Upon completion of the course, students should be able to:
1. Understand the role of cost accounting in information for managerial decision making
2. Understand fundamental concepts and techniques of cost/managerial accounting.
3. Understand the general concepts of cost estimation.
4. Understand costing and control of materials, labor, and factory overhead. Syllabus Course # Page 2 of 14
5. Learn objectives of cost accumulation system and be able to distinguish between “periodic versus perpetual” and “actual and versus standard.”
6. Understand job order, process, and activity-based cost systems.
7. Learn accounting for joint product and by-product costing.
8. Understand and interpret variances.
9. Become familiar the budgeting process.
10. Understand the different types of budgets: operating, flexible, and capital budgets.
11. Learn the standard cost system.
12. Learn the general analysis of cost and profit
13. Use computer applications in solving cost accounting problems
14.
Activity-based costing (ABC) is a costing model that assigns costs to products and services based on their actual consumption of activities like production, planning, and product development. ABC identifies cost drivers, like number of batches or product development hours, that influence activity levels and resource consumption. This helps assign indirect costs more accurately than traditional costing models and identify unprofitable products or inefficient processes.
The Clean Air Act was passed in 1970 to regulate air pollution in the United States. It established national standards for air quality and emissions. The law aimed to reduce air pollution through enforcement of stricter standards for coal plants, factories, and vehicles. It has been amended several times to address economic and technological feasibility concerns while still pursuing air quality goals. Overall, the Clean Air Act has significantly improved air quality in the U.S. since its passage.
The document discusses the concept of cost-benefit analysis (CBA) for evaluating information systems projects. CBA measures and compares the costs and benefits of a project to determine if its benefits outweigh its costs. The CBA process involves identifying the tangible and intangible costs and benefits of a project, evaluating them, and choosing the system with the lowest costs but highest benefits. CBA is useful for decision making by individuals, companies, and governments.
Activity-based costing (ABC) is a costing methodology that assigns overhead costs to products and services based on their actual consumption of activities like production, storage, delivery etc. It was developed in the 1980s as a response to the limitations of traditional costing systems in assigning overhead costs. ABC identifies activities in an organization and assigns the costs of each activity to outputs using cost drivers. It provides more accurate product costs than traditional costing and helps management understand overhead costs better. While it requires more initial costs and maintenance than traditional costing, ABC supports performance management and decision making.
The Lowdown on Lean Accountingvan der Merwe, Anton; Thomson, Jef.docxcherry686017
The Lowdown on Lean Accounting
van der Merwe, Anton; Thomson, Jeffrey. Strategic Finance88.8 (Feb 2007): 26-33.
Abstract (summary)
Lean thinking, the foundation for Lean Accounting, has a history of demonstrable benefit and is likely to have a significant impact on the US business landscape. Lean refers to the management system of applying Lean principles to operations, and Lean Accounting refers to attempts to derive monetary management information based on Lean principles. There are at least three assertions in Lean Accounting that justify closer scrutiny: 1. Accounting is the problem. 2. All conversion costs (in Lean Accounting, conversion costs are defined as all value stream costs except materials and purchased outside services) are fixed. 3. Claims for support of external reporting. Lean thinking has a history of success and the potential for providing significant benefit to adopters. The principles of eliminating waste, replacing rather than duplicating, empowering workers, customer pull vs. company push, etc. are important tenets to help improve US global competitiveness.
Should management accountants get on the bandwagon-or not?
The Lean Revolution is off and running! But before we get too far in transforming businesses, especially the management accounting support for Lean (aka Lean Accounting or LA), it's important to slow down just a bit and address some critical questions in the spirit of advancing the thinking for the benefit of practitioners. In this regard we want to answer two questions: (1) Is Lean Accounting a viable replacement for, complement to, and/or supplement for current and evolving management accounting approaches? (2) Does Lean Accounting have the capability to advance two of the more forward-looking roles undertaken by the management accountant: decision support and enterprise optimization?
Lean thinking, the foundation for Lean Accounting, has a history of demonstrable benefit and is likely to have a significant impact on the U.S. business landscape. Lean refers to the management system of applying Lean principles to operations, and Lean Accounting refers to attempts to derive monetary management information based on Lean principles. This unique bond between an operations flow design approach (Lean) and a management accounting approach means the process of coming to terms with LA has a number of distinctive traits. The management accountant is required to gain an understanding of Lean thinking, principles, and practices, and a manufacturing shop floor emphasis requires that those from service industries dig a little deeper before they will be comfortable. A careful scrutiny of LA literature (books, articles, the Lean Accounting Summit in September 2006, etc.) reveals a number of assertions (and/or strong implications) related to management accounting that require technical analysis and broader, more open debate for the benefit of practitioners. The process of evaluating LA requires addressing four aspects of the ...
Chapter 11 : Activity Based Costing and Accounting InformationPeleZain
Activity-based costing (ABC) is a methodology that assigns overhead costs to products and services based on their use of activities and resources. It involves identifying costs, loading secondary and primary cost pools, measuring activity drivers, allocating costs between pools, charging costs to cost objects, formulating reports, and acting on the information. ABC provides a more precise allocation of overhead costs than traditional methods by recognizing the causal relationships between costs, activities, and products or services.
Activity Based Costing From The Perspective Of Competitive...Katherine Alexander
This document discusses activity-based costing (ABC) from the perspective of Nigerian manufacturing firms. It examines ABC's ability to support strategic management and provide benefits to organizations. The study utilized contingency theory and employed a descriptive survey design using structured questionnaires. Data analysis with SPSS found four dimensions that explain variances in the data: overall performance, strategic cost allocation, increased efficiency, and increased effectiveness. Regression results showed a positive and significant relationship at the 5% level. Findings reveal no statistically significant difference in cost reduction between ABC and traditional costing, though ABC tended to have a higher effect.
Papertexture View Of White Crumpled Paper Photo SunwallsMichele Thomas
The document provides instructions for requesting paper writing assistance from a website. It outlines a 5-step process: 1) Create an account with a password and email. 2) Complete a form with paper details, sources, and deadline. 3) Review writer bids and qualifications and place a deposit. 4) Review the paper and authorize payment if satisfied. 5) Request revisions until fully satisfied, with a refund option for plagiarism.
Here are some key differences between generations:
- Career expectations: Older generations often expected to work for the same company for life, while younger generations expect to change jobs/careers frequently to advance.
- Work-life balance: Younger generations value flexibility and personal time more than older generations who often prioritized work over other aspects of life.
- Education: More younger people get college degrees but face greater student debt, while older generations could often support a family with just a high school degree.
- Technology: Younger generations have grown up with the internet and smartphones while older generations had to adapt to new technologies later in life.
- Happiness definitions: Younger people may find happiness in experiences more
Free Printable Castle-Shaped Writing Templates. This PDMichele Thomas
Michael Corleone starts as a reluctant mobster who wants to stay out of the family business, but is drawn into the life after his father is shot. Throughout the film, Michael hardens as he takes over his father's criminal empire, becoming cold and ruthless in his pursuit of power. By the end, Michael has transformed completely into the calculating and menacing "Godfather."
The document provides instructions for students seeking writing help from HelpWriting.net. It outlines a 5-step process: 1) Create an account with a password and email. 2) Complete a 10-minute order form providing instructions, sources, and deadline. 3) Review bids from writers and choose one based on qualifications. 4) Review the completed paper and authorize payment if pleased. 5) Request revisions to ensure satisfaction, and the company offers refunds for plagiarized work.
Essay On The Benefits Of Music Education, AdvantagMichele Thomas
This document outlines the steps to create an account and request paper writing assistance on the HelpWriting.net website. Users must first register with a password and email, then complete an order form providing instructions, sources, and deadline. Writers bid on the request, and the user chooses a writer based on qualifications. The writer completes the paper and the user can request revisions until satisfied. The website aims to provide original, high-quality content and refunds plagiarized work.
The document provides instructions for creating an account and submitting assignment requests on the HelpWriting.net website. It outlines a 5-step process: 1) Create an account with an email and password. 2) Complete a form with assignment details, sources, and deadline. 3) Writers will bid on the request and the customer can choose a writer. 4) The customer will receive the completed paper and can request revisions if needed. 5) HelpWriting.net guarantees original, high-quality work and refunds are offered for plagiarized content.
Paper In Education - How Writing On Paper Promotes Cognitive DevelopMichele Thomas
1. African Americans held over 2,000 public offices during Reconstruction, from local to national levels, though not in proportion to their population.
2. Radical Reconstruction transformed the Southern United States from 1863 to 1877 after the Civil War through constitutional changes and new state governments.
3. It aimed to establish civil and political equality for Black Americans but was met with resistance from Southern whites.
Writing Opinion Essay Prompts 5Th Grade OpiMichele Thomas
The student reflects on leading a psychoeducational group on mindfulness. The goals of the group were to define mindfulness, share mindfulness skills, discuss applicability, and practice skills. Goals of psychoeducation include sharing information on a topic and building related skills, as well as allowing members to share experiences and build their own support systems. The student felt the group goals and expectations of psychoeducation were met, as information was shared, members participated, and skills for personal use were discussed, though a few members did not actively participate.
The BBC played an instrumental role in boosting morale during World War 2 in Britain and keeping citizens informed. It brought soldiers abroad and citizens at home closer together through radio broadcasts. The BBC represented diverse regional viewpoints from across England, including Wales, Scotland, and Northern Ireland. This helped foster a sense of cultural syncretism and unity across the regions of Britain during the war.
College Dissertations Pay Someone To WriteMichele Thomas
The document discusses a website that helps students pay others to write their college assignments and dissertations. It outlines a 5-step process: 1) Create an account, 2) Submit a request with instructions and deadline, 3) Review bids from writers and choose one, 4) Review the completed paper and authorize payment, 5) Request revisions if needed and the company guarantees original work or a refund.
This document discusses the process of registering and submitting an assignment request on the website HelpWriting.net. It outlines the 5 steps to do so: 1) Create an account, 2) Complete the order form providing instructions, sources, and deadline, 3) Review bids from writers and choose one, 4) Review the completed paper and authorize payment, 5) Request revisions if needed, knowing revisions and refunds are available. The overall summary is that this document outlines the 5-step process for submitting an assignment request and receiving a completed paper from a writer on HelpWriting.net.
101 GRE Issue Essay Topics Top GRE Writing PromptsMichele Thomas
The document discusses the controversy over using animals in the classroom, with some arguing that classroom pets help kids by providing companionship, while others disagree with having animals in the classroom. Both perspectives on whether classroom pets are beneficial or not are presented, without making a clear argument for one side over the other. The summary touches on the main topic and opposing views in the debate over classroom pets.
Nursing Program Portfolio Essay Example Topics AnMichele Thomas
This document provides instructions for requesting writing assistance from HelpWriting.net. It outlines a 5-step process: 1) Create an account with a password and email. 2) Complete a 10-minute order form providing instructions, sources, and deadline. 3) Review bids from writers and select one based on qualifications. 4) Review the completed paper and authorize payment if satisfied. 5) Request revisions until fully satisfied, and the company guarantees original, high-quality work or a full refund.
This document summarizes key points about Stephen E. Ambrose's book "D-Day" regarding the role of destroyers in the Normandy landings on June 6, 1944. It states that the destroyers played a pivotal supporting role for the infantry on the beaches, particularly helping the soldiers landing at Omaha Beach. The summary claims that without the destroyers' support, the Allied landings would have failed and the mission may have been defeated.
Evaluate Your Learning OutcomesWrite a critical evaluation o.docxturveycharlyn
Evaluate Your Learning Outcomes
Write a critical evaluation of your learning outcome. In your response, consider:
1. Your managerial accounting skills/knowledge prior to taking this class
2. Base on the course content, discuss the new skills you acquired from this class? How relevant are the new skills in your profession?
3. How would you apply your new knowledge?
Required:
1.
Post your original discussion. Read and respond to three (3) your classmates.
See the class syllabus for posting requirements.
2.
Be sure to support your work with specific citations using APA format
3.
Read a selection of your colleagues' postings using one or more of the following ways:
· Share an insight from having read your colleagues' postings, synthesizing the information to provide new perspectives.
· Offer and support an alternative perspective using readings from the class materials or from your own research.
· Validate an idea with your own experience and additional research.
· Make a suggestion based on additional evidence drawn from readings or after synthesizing multiple postings.
· Expand on your colleagues' postings by providing additional insights or contrasting perspectives based on readings and evidence.
· Return to this Discussion several times to read the responses to your initial posting. Note what you have learned and/or any insights you have gained as a result of the comments your colleagues made.
Course Description:
This course introduce students to a variety of topics related to financial and economics concepts and theories including general micro- and macroeconomics concepts, investments in different types of financial assets (stocks, bonds, options, etc.). CAPM, financing of projects, financial structure, agency theory and agency costs, corporate governance, diversification, mergers and acquisition, and asset collateralization.
Course Objectives & Learning Outcomes
Upon completion of the course, students should be able to:
1. Understand the role of cost accounting in information for managerial decision making
2. Understand fundamental concepts and techniques of cost/managerial accounting.
3. Understand the general concepts of cost estimation.
4. Understand costing and control of materials, labor, and factory overhead. Syllabus Course # Page 2 of 14
5. Learn objectives of cost accumulation system and be able to distinguish between “periodic versus perpetual” and “actual and versus standard.”
6. Understand job order, process, and activity-based cost systems.
7. Learn accounting for joint product and by-product costing.
8. Understand and interpret variances.
9. Become familiar the budgeting process.
10. Understand the different types of budgets: operating, flexible, and capital budgets.
11. Learn the standard cost system.
12. Learn the general analysis of cost and profit
13. Use computer applications in solving cost accounting problems
14.
Activity-based costing (ABC) is a costing model that assigns costs to products and services based on their actual consumption of activities like production, planning, and product development. ABC identifies cost drivers, like number of batches or product development hours, that influence activity levels and resource consumption. This helps assign indirect costs more accurately than traditional costing models and identify unprofitable products or inefficient processes.
The Clean Air Act was passed in 1970 to regulate air pollution in the United States. It established national standards for air quality and emissions. The law aimed to reduce air pollution through enforcement of stricter standards for coal plants, factories, and vehicles. It has been amended several times to address economic and technological feasibility concerns while still pursuing air quality goals. Overall, the Clean Air Act has significantly improved air quality in the U.S. since its passage.
The document discusses the concept of cost-benefit analysis (CBA) for evaluating information systems projects. CBA measures and compares the costs and benefits of a project to determine if its benefits outweigh its costs. The CBA process involves identifying the tangible and intangible costs and benefits of a project, evaluating them, and choosing the system with the lowest costs but highest benefits. CBA is useful for decision making by individuals, companies, and governments.
Activity-based costing (ABC) is a costing methodology that assigns overhead costs to products and services based on their actual consumption of activities like production, storage, delivery etc. It was developed in the 1980s as a response to the limitations of traditional costing systems in assigning overhead costs. ABC identifies activities in an organization and assigns the costs of each activity to outputs using cost drivers. It provides more accurate product costs than traditional costing and helps management understand overhead costs better. While it requires more initial costs and maintenance than traditional costing, ABC supports performance management and decision making.
The Lowdown on Lean Accountingvan der Merwe, Anton; Thomson, Jef.docxcherry686017
The Lowdown on Lean Accounting
van der Merwe, Anton; Thomson, Jeffrey. Strategic Finance88.8 (Feb 2007): 26-33.
Abstract (summary)
Lean thinking, the foundation for Lean Accounting, has a history of demonstrable benefit and is likely to have a significant impact on the US business landscape. Lean refers to the management system of applying Lean principles to operations, and Lean Accounting refers to attempts to derive monetary management information based on Lean principles. There are at least three assertions in Lean Accounting that justify closer scrutiny: 1. Accounting is the problem. 2. All conversion costs (in Lean Accounting, conversion costs are defined as all value stream costs except materials and purchased outside services) are fixed. 3. Claims for support of external reporting. Lean thinking has a history of success and the potential for providing significant benefit to adopters. The principles of eliminating waste, replacing rather than duplicating, empowering workers, customer pull vs. company push, etc. are important tenets to help improve US global competitiveness.
Should management accountants get on the bandwagon-or not?
The Lean Revolution is off and running! But before we get too far in transforming businesses, especially the management accounting support for Lean (aka Lean Accounting or LA), it's important to slow down just a bit and address some critical questions in the spirit of advancing the thinking for the benefit of practitioners. In this regard we want to answer two questions: (1) Is Lean Accounting a viable replacement for, complement to, and/or supplement for current and evolving management accounting approaches? (2) Does Lean Accounting have the capability to advance two of the more forward-looking roles undertaken by the management accountant: decision support and enterprise optimization?
Lean thinking, the foundation for Lean Accounting, has a history of demonstrable benefit and is likely to have a significant impact on the U.S. business landscape. Lean refers to the management system of applying Lean principles to operations, and Lean Accounting refers to attempts to derive monetary management information based on Lean principles. This unique bond between an operations flow design approach (Lean) and a management accounting approach means the process of coming to terms with LA has a number of distinctive traits. The management accountant is required to gain an understanding of Lean thinking, principles, and practices, and a manufacturing shop floor emphasis requires that those from service industries dig a little deeper before they will be comfortable. A careful scrutiny of LA literature (books, articles, the Lean Accounting Summit in September 2006, etc.) reveals a number of assertions (and/or strong implications) related to management accounting that require technical analysis and broader, more open debate for the benefit of practitioners. The process of evaluating LA requires addressing four aspects of the ...
Chapter 11 : Activity Based Costing and Accounting InformationPeleZain
Activity-based costing (ABC) is a methodology that assigns overhead costs to products and services based on their use of activities and resources. It involves identifying costs, loading secondary and primary cost pools, measuring activity drivers, allocating costs between pools, charging costs to cost objects, formulating reports, and acting on the information. ABC provides a more precise allocation of overhead costs than traditional methods by recognizing the causal relationships between costs, activities, and products or services.
Activity Based Costing From The Perspective Of Competitive...Katherine Alexander
This document discusses activity-based costing (ABC) from the perspective of Nigerian manufacturing firms. It examines ABC's ability to support strategic management and provide benefits to organizations. The study utilized contingency theory and employed a descriptive survey design using structured questionnaires. Data analysis with SPSS found four dimensions that explain variances in the data: overall performance, strategic cost allocation, increased efficiency, and increased effectiveness. Regression results showed a positive and significant relationship at the 5% level. Findings reveal no statistically significant difference in cost reduction between ABC and traditional costing, though ABC tended to have a higher effect.
Papertexture View Of White Crumpled Paper Photo SunwallsMichele Thomas
The document provides instructions for requesting paper writing assistance from a website. It outlines a 5-step process: 1) Create an account with a password and email. 2) Complete a form with paper details, sources, and deadline. 3) Review writer bids and qualifications and place a deposit. 4) Review the paper and authorize payment if satisfied. 5) Request revisions until fully satisfied, with a refund option for plagiarism.
Here are some key differences between generations:
- Career expectations: Older generations often expected to work for the same company for life, while younger generations expect to change jobs/careers frequently to advance.
- Work-life balance: Younger generations value flexibility and personal time more than older generations who often prioritized work over other aspects of life.
- Education: More younger people get college degrees but face greater student debt, while older generations could often support a family with just a high school degree.
- Technology: Younger generations have grown up with the internet and smartphones while older generations had to adapt to new technologies later in life.
- Happiness definitions: Younger people may find happiness in experiences more
Free Printable Castle-Shaped Writing Templates. This PDMichele Thomas
Michael Corleone starts as a reluctant mobster who wants to stay out of the family business, but is drawn into the life after his father is shot. Throughout the film, Michael hardens as he takes over his father's criminal empire, becoming cold and ruthless in his pursuit of power. By the end, Michael has transformed completely into the calculating and menacing "Godfather."
The document provides instructions for students seeking writing help from HelpWriting.net. It outlines a 5-step process: 1) Create an account with a password and email. 2) Complete a 10-minute order form providing instructions, sources, and deadline. 3) Review bids from writers and choose one based on qualifications. 4) Review the completed paper and authorize payment if pleased. 5) Request revisions to ensure satisfaction, and the company offers refunds for plagiarized work.
Essay On The Benefits Of Music Education, AdvantagMichele Thomas
This document outlines the steps to create an account and request paper writing assistance on the HelpWriting.net website. Users must first register with a password and email, then complete an order form providing instructions, sources, and deadline. Writers bid on the request, and the user chooses a writer based on qualifications. The writer completes the paper and the user can request revisions until satisfied. The website aims to provide original, high-quality content and refunds plagiarized work.
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1. African Americans held over 2,000 public offices during Reconstruction, from local to national levels, though not in proportion to their population.
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The student reflects on leading a psychoeducational group on mindfulness. The goals of the group were to define mindfulness, share mindfulness skills, discuss applicability, and practice skills. Goals of psychoeducation include sharing information on a topic and building related skills, as well as allowing members to share experiences and build their own support systems. The student felt the group goals and expectations of psychoeducation were met, as information was shared, members participated, and skills for personal use were discussed, though a few members did not actively participate.
The BBC played an instrumental role in boosting morale during World War 2 in Britain and keeping citizens informed. It brought soldiers abroad and citizens at home closer together through radio broadcasts. The BBC represented diverse regional viewpoints from across England, including Wales, Scotland, and Northern Ireland. This helped foster a sense of cultural syncretism and unity across the regions of Britain during the war.
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The document discusses the controversy over using animals in the classroom, with some arguing that classroom pets help kids by providing companionship, while others disagree with having animals in the classroom. Both perspectives on whether classroom pets are beneficial or not are presented, without making a clear argument for one side over the other. The summary touches on the main topic and opposing views in the debate over classroom pets.
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Here are a few key reflections on narcissism from your reading:
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Temple of Asclepius in Thrace. Excavation resultsKrassimira Luka
The temple and the sanctuary around were dedicated to Asklepios Zmidrenus. This name has been known since 1875 when an inscription dedicated to him was discovered in Rome. The inscription is dated in 227 AD and was left by soldiers originating from the city of Philippopolis (modern Plovdiv).
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Philippine Edukasyong Pantahanan at Pangkabuhayan (EPP) CurriculumMJDuyan
(𝐓𝐋𝐄 𝟏𝟎𝟎) (𝐋𝐞𝐬𝐬𝐨𝐧 𝟏)-𝐏𝐫𝐞𝐥𝐢𝐦𝐬
𝐃𝐢𝐬𝐜𝐮𝐬𝐬 𝐭𝐡𝐞 𝐄𝐏𝐏 𝐂𝐮𝐫𝐫𝐢𝐜𝐮𝐥𝐮𝐦 𝐢𝐧 𝐭𝐡𝐞 𝐏𝐡𝐢𝐥𝐢𝐩𝐩𝐢𝐧𝐞𝐬:
- Understand the goals and objectives of the Edukasyong Pantahanan at Pangkabuhayan (EPP) curriculum, recognizing its importance in fostering practical life skills and values among students. Students will also be able to identify the key components and subjects covered, such as agriculture, home economics, industrial arts, and information and communication technology.
𝐄𝐱𝐩𝐥𝐚𝐢𝐧 𝐭𝐡𝐞 𝐍𝐚𝐭𝐮𝐫𝐞 𝐚𝐧𝐝 𝐒𝐜𝐨𝐩𝐞 𝐨𝐟 𝐚𝐧 𝐄𝐧𝐭𝐫𝐞𝐩𝐫𝐞𝐧𝐞𝐮𝐫:
-Define entrepreneurship, distinguishing it from general business activities by emphasizing its focus on innovation, risk-taking, and value creation. Students will describe the characteristics and traits of successful entrepreneurs, including their roles and responsibilities, and discuss the broader economic and social impacts of entrepreneurial activities on both local and global scales.
1. Sm Ch 17 Essay
CHAPTER 17
JOB ORDER COST SYSTEMS
AND OVERHEAD ALLOCATIONS
OVERVIEW OF BRIEF EXERCISES, EXERCISES, PROBLEMS, AND CRITICAL
THINKING CASES
Brief
Exercises
B. Ex. 17.1
B. Ex. 17.2
B. Ex. 17.3
B. Ex. 17.4
B. Ex. 17.5
B. Ex. 17.6
B. Ex. 17.7
B. Ex. 17.8
B. Ex. 17.9
B. Ex. 17.10
Topic
Accounting for overhead
Transferring costs
Overhead application rates
Actual and applied overhead
Selecting a cost system
Applying direct labor
Applying direct materials
Recording manufacturing costs
Selecting activity bases
Activity–based costing
Exercises
17.1
Topic
Accounting terminology
3. 17.8 A,B
Healthy Hound, Inc./Happy Cat
A comprehensive ABC problem that requires students to allocate several cost pools to multiple
products. Students are also
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4.
5. Activity Based Costing
Robert S. Kaplan and Robin Cooper was designed the activity based costing (ABC) method in 1988.
It was felt that there was a need for more accurate and up–to–date information and a more proactive
approach to planning and managing the costs. ABC is a process to identify the costs of all activities
and allocating, applying, assigning or tracing costs to products. Activity based costing is a costing
technique, tool, system, mechanism or approach. It may be used in addition to the current traditional
system or used in place of it. This will enable the new system to be applied consistently so that the
opportunity to revert to old ways is limited. Activity based costing is aims to cost the products
independent of output volume and to apply ... Show more content on Helpwriting.net ...
While, the top management in India firm they prefer to the cross–functional teams. It is the process
orientation and adequate training to the employees on the ABC. This process is the linkages work so
it shows their initiative between activity–based team The top management support, technology
sophistication, large size firms, and integration with the financial system were the factors affecting
the usage of the activity bases costing. The use of activity based cost system is found to be
positively correlated with the firm size. The organizational factors such as top management support,
'non–accounting ownership' and the training were found to be vital in the successful implementation
of the activity–based costing. Before 1999, ABC implementation in France had a highly detailed
legislation covering how firms should managerially account for their transaction. Like in the USA,
ABC was facing difficult problems as a remedy for the crisis of management accounting. From 1991
to 1996, French scholars dedicated large amounts of their writings to the method's costing aspects,
among which the general architecture of the system and the translation or adaptation of specific
concepts, such as "cost driver", required to operate it.
In criticisms and evolutions of France was happen a few months after its importation by a network
of pioneers, ABC faced a major controversy.
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6.
7. Budget: Management and Budgeting
Introduction
What Is A Budget?
"A budget is a plan." More specifically, a budget is a plan of action matched by resources required to
implement the plan. Budgets generally divide between two broad categories: the operating budget,
sometimes known as the "expense" budget and the capital budget. Budget in simple word means a
sum of money allocated for a particular purpose. Budget is there in everyone's life, it may be a small
or a big one. Budget is a tool which helps in controlling and planning the functions of an
organization. It is formalized statements of the goals of an organization stated in financial terms and
accomplishes several important functions for managers. It states future projections of revenues,
expenses and expected ... Show more content on Helpwriting.net ...
Whereas bottom up budgeting method consists of lower level management prepares the budget and
submit it to top management for approval. The main task of this level is to formulate and
disseminate the goals of the business, evaluate each department and integrate the various budgets
submitted by subunits into a total organizational budget.
The budgeting process should be flexible and based upon degree of goal accomplishment during the
period and budgets for the next planning period can be adjusted to help the management meet
organizational goals. If the goals are changed then the budgets should also be changed.
Traditional Budget
Traditional budgeting is the process of budgeting which is in use for the past many years in the
organizations. It is based upon single basis; mostly indirect costs are distributed to all products and
services. Often products which have higher volume are over costed. And the lower volume products
are often understated. It is incremental in nature; old techniques are used, have a short term view
and mainly deal with smaller segments. Traditional budgeting takes no account of the fact that
income are uncertain, unplanned things arises, that social, political, economic situations change
without warning and stock markets rates moves unpredictably. Traditional budgeting is now
outsourced in most organizations. This is due to the effect that budgeting serves
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8.
9. Is Activity Based Costing ( Abc ) Essay
The first cost system of this part of this essay is activity–based costing (ABC). Cooper and Kaplan
(1988) implemented ABC for taking care of issues of Traditional costing frameworks.
For allocating costs, Tradtional costing uses a single number like the machine hours or the direct
labour hour, also cost allocations are volume–based. Comparing ABC with Traditional Costing
Systems, ABC include all activities for a product, to making it easier to more accurately measure
and allocate costs (Cooper, 1990; Cokins, Strat–ton, & Helbling, 1993).
It moves away from assigning costs to individual products but rather to activities or processes,
which allows for assigning a larger part of overhead costs to specific cost units (Cooper & Kaplan,
1988; Friedman & Lyne, 1997).
Also important to know is that ABC define all the company activities as value adding or non–value
adding activities (Cooper & Kaplan, 2005). Non–value added activities create waste, result in
postponement, add expenses to the items, or for which cost clients are not willing to pay. ABC helps
an association in discovering chances to streamline or lessen the expenses, or wipes out the whole
movement, particularly if there is no esteem added viewpoint to it (Drury, 2012).
Many have the believe that ABC is better than Traditional Costing because ABC say more about the
driven costs, and can split on any single activity and receives so more accurate cost details (Akyol,
Tuncel, & Bayhan, 2007; Kee, 1995). As per this,
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10.
11. Response To Brittany Hill's Job & Process Costing System
In response to Brittany Hill's thread on Job & Process Costing Systems, I can easily say that she was
very articulate in her passage. The thread is well detailed and presented in a manner that is not
confusing to the reader. To begin with, it is important that she starts out by highlighting the
differences between the two. For most people, costing systems can mean almost the same but as
described by Cohen & Kaimenaki (2011), different situations will allow specific systems to be
utilized. This is exactly what Hill has been able to communicate. It was wise to talk about the two
systems separately, with each having its own paragraph. The importance of this is emphasized
through the examples, which you also managed to bring out in a clear and
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12.
13. Cooperative Bank Case
Title of the Report:
Case Analysis of 'The Cooperative Bank'
The Purpose:
The purpose of the report is to submit the analysis of The Cooperative Bank based on the Activity
Based Costing methodology
To whom it is submitted (Name of the instructor):
Prof. Sandhya Bhatia,
Professor, Managerial Accounting,
Indian Institute of Management, Udaipur
Name of the Author:
Abhishek Sengupta
Anubhav Nigam
Ravindran Damodaran
Saurabh Srivastava
Date of Submission:
24 February 2013
Organization/Institute's name (and logo):
Indian Institute of Management, Udaipur
TABLE OF CONTENTS
Situation ... Show more content on Helpwriting.net ...
2. Clear Debit Items ($1022140) – The process of clearing Debit Items can be majorly automated
through Automated Clearing Houses (ACH). The manual clearing facility may still be made
available only on the basis of need and customer profitability.
3. Customer Inquiries ($850569) – This process/activity can be automated through Point of Sales
(POS). The strategy can reduce the associated overheads and at the same time improve customer
experience.
VISAAccounts: The VISA account is the second highest revenue generating stream. The revenue is
14. contributed by the three products viz. VISA Classic, VISAAffinities and VISA Gold. Activity costs
account to 40 % ($3385954) of the product revenue. The target cost reduction activities in this case
are –
1. Process VISA Transactions ($917056) – These transaction activities can be automated through
computer processing and this reduces the associated overheads.
2. Marketing and Sales Activity ($453886) – These costs can be reduced by having cross–sales of
Credit cards with the current Account customers
Personal Loans: The product gives the highest net profit among the range of available products. The
Marketing and Sales Activity ($815211) and Computer Processing activity ($113403) can be
reduced by the deploying of strategies as for Visa Accounts and Current Account respectively.
CUSTOMER EXPERIENECE AND PROFITABILITY
The improvement in Customer Experience and Profitability was
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15.
16. Activity Based Costing And How It Works
I chose to write about activity based costing. I chose to write this paper because I wanted to know
more about activity based costing and how it works. According to our text, activity based costing
(ABC) has received a lot of attention since the 90's. ABC has a lot of more details and can be more
complicated than all the other costing methods, however it's more accurate. "Costing systems are
information systems. They require a specific type of information such as direct labour hours and
units produced, to be of value. It is from the input data that product costs and other information are
determined according to the specific costing system defined methodology. The results obtained
would depend on the costing system used, since the same input data could be used in different ways.
In this case the traditional costing system or an activity based costing system" (Marx.) A costing
system should provide information to help minimize waste, but should not be wasteful in itself. In
other words, the resources required to design, implement and maintain a costing system should be
less than the benefit derived from the use of the system (Marx.) "Activity based costing (ABC)
assigns manufacturing overhead costs to products in a more logical manner than the traditional
approach of simply allocating costs on the basis of machine hours. Activity based costing first
assigns costs to the activities that are the real cause of the overhead. It then assigns the cost of those
activities only to
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17.
18. Evaluation Of New Cost System Essay
MEMORANDUM
TO: CEO
FROM: CONTROLLER
SUBJECT: EVALUATION OF NEW COST SYSTEM
DATE: FEBRUARY 19, 2009
The purpose of this memo is to discuss and evaluate our traditional cost based system versus the
new activity based or discrete product costing system. I am going to highlight some of the positive
aspects of the new system, discuss future scope and improvements along with some deeper analysis
into our unprofitable products and customers.
Over the years, many of our managers and higher officials have had trouble making business
decisions due to the way our P&Ls were structured. We faced several challenges when trying to
negotiate with our customers because we were unable to show a cost break down which took into
account every aspect of the production process. Although, there are some advantages with the
traditional costing approach, such as it aligns with general cost accounting principles, ease of
implementation in companies that provide a specific product, it had several drawbacks, such as:
Standard costing did not record sales deductions and individual customer costs.
There were arbitrary percentage markups through product allocation.
Equipment costs were included under factory overhead costs as percentage markup.
It did not reflect quality control, changeover and process engineering costs.
Only few variable costs were taken into account, while there were other costs like worker salaries,
quality control and engineering costs which could vary due to
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19.
20. Products Costing System
Contents
Executive Summary................................................................................ Page 2
Introduction......................................................................................... Page 3
Analysis Part A – Conceptual Issues............................................................ Page 4
Analysis Part B – The Practical Application to Sunflower Ltd............................... Page 5
Reflective Learning.................................................................................... Page 6
Conclusion .......................................................................................... Page 7
References .......................................................................................... Page 8
Appendix............................................................................................ Page 9
Executive Summary
Dear Mr & Mrs Izsmart,
We acknowledge that Sunflower Ltd is a large public company, reputable for its diverse range of
flowers and large customer base. At present, we have identified that there is no formal product ...
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Generally, for long–term decision making such as determining which product lines to discontinue or
promote and what price to set on these products requires all costs in the value chain to be
considered. When making short–term decision in relation to existing products, managers may only
choose to consider manufacturing and downstream costs as upstream costs have already been
incurred. (refer to appendix)
Additionally, product costs may be used in assisting with planning and control. Managers may need
to obtain reliable cost estimates for planning purposes, as budgets are set. If costs vary and are
frequently subject to change then decision making will not be effective. By comparing actual costs
to planned costs, current costs can be controlled.
21. Managers must assess the product profitability of a product so they are able to make optimal
decisions about product mix and set appropriate prices. The true cost to produce a product can be
exposed and any possible reduction in the cost to produce this good can be identified. Additionally,
non–value adding activities may be identified and eliminated. This will prevent underpricing for a
good where the company mistakenly believes profits are possible when true costs and profitability
are hidden under inadequate analysis.
However, when deciding to obtain additional information to facilitate managerial decision making,
as always, costs and benefits of their use must firstly be taken into account. The needs of
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22.
23. MGMT 20100 Practice Midterm Exam I
LAST NAME: _________________________ FIRST NAME___________________________
PUID________________________________Section________
Purdue University
Krannert School of Management
MGMT 201 – Managerial Accounting I
Spring 2015
Practice Midterm Exam
This practice exam consists of 30 multiple choice questions on 11 pages (including this cover page).
Answer all questions.
No partial credit is available for multiple choice questions. Be sure to put your answers to the
multiple choice questions on your Scantron form.
The exam is closed book. A basic four function calculator is permitted.
GOOD LUCK.
Please circle the best answer and fill–in the corresponding circle on your Scantron sheet.
Only answers on the Scantron will be scored.
1. ... Show more content on Helpwriting.net ...
All of these figures include data that pertain to job no. J42.
What is the total cost assigned to J42?
a.
b.
c.
d.
11.
$17,100
$16,200
$15,900
$15,000
Many traditional costing systems:
a. trace manufacturing overhead to individual activities and require the development of numerous
activity–costing rates.
24. b. write off manufacturing overhead as an expense of the current period.
c. combine widely varying elements of overhead into a single cost pool.
d. use a host of different cost drivers (e.g., number of production setups, inspection hours, orders
processed) to improve the accuracy of product costing.
MGMT 201 Practice Midterm Exam–Page 4
12.
Consider the following statements regarding traditional costing systems:
I. Overhead costs are applied to products on the basis of volume–related measures.
II. All manufacturing costs are easily traceable to the goods produced.
III. Traditional costing systems tend to distort unit manufacturing costs when numerous goods are
made that have widely varying production requirements.
Which of the above statements is (are) false?
a. I only.
b. II only.
c. III only.
d. I and II.
13.
Saylor manufactures products X and Y, applying overhead on the basis of labor hours. X, a low–
volume product, requires a variety of complex manufacturing procedures. Y, on the other hand, is
both a high–volume product and relatively simplistic in
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25.
26. Job Cost Of Job Costing
Introduction
Accounting to determine which items or jobs are generating the most net income can be extremely
important to financial managers in today's economy. Managers must determine which products are
making performing the best so that they can capitalize on profits. This also helps to know when it
should cut its losses. There are three very useful methods of identifying costs associated to a
particular item which are job order costing, activity based costing (ABC), process costing. Job order
costing isolates costs to a particular job. ABC compares multiple items which are manufactured.
Process costing assesses items which are massed produced and provides analysis to the cost through
the various stages from beginning to completion. This essay will explain each of these methods and
then provide examples for each of them.
Job Order Costing
Job costing is a method of calculating the amount of dollars that it will take to perform a job in its
entirety for the entity performing the work. Job costing is a valuable tool for managers of financial
information in a company because it is an efficient way of learning which jobs have made money
and which jobs have lost money. This is because the job costing method can trace or link how much
resource such as labor, material, and overhead are spent to complete the job. Steven Bragg states
that "Job costing is the most common method for marshaling cost accounting information into a data
structure containing usable information". He then
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27.
28. Ac552 W3 Lecture Process Costing Quiz
Use the following information for questions 1––10. Top That manufactures baseball–style hats.
Material is introduced at the beginning of the process in the Cutting Department. Conversion costs
are incurred (and allocated) uniformly throughout the process. As the cutting of material is
completed, the pieces are immediately transferred to the Sewing Department. Data for the Cutting
Department for the month of February 2005 follow: Work in process, January 31–– 50,000 units
100% complete for direct materials, 40% completed for conversion costs actual costs of direct
materials, $70,500; actual costs of conversion, $34,050 Units started during February, 225,000 Units
completed during February, 200,000 ... Show more content on Helpwriting.net ...
$1.52 $1.81
6. Assuming Top That uses the first–in, first–out (FIFO) method to account for inventories, the
assignment of costs to units completed and transferred to the Sewing Department during February is
a. $658,350. b. $636,450. c. $666,000. d. $652,000.
The following additional data apply to questions 7––9. Standard costs for the Cutting Department:
Direct materials – $1.50 per unit;
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29.
30. Cost Method Paper
Running Head: Costing Methods Paper
Costing Methods Paper
Lavelle Haynes
ACC/561
February 14, 2011
Professor Micheal Gaspar
Super Bakery is a distinguished company created in 1990. The company has is a supplier of mineral,
vitamin, and protein enriched doughnuts. The strategy applied by the company is job order cost
method. Job costing is a product costing system when costs are accumulated by specific job orders
and assigned to batches of products. In other words, manufacturing costs are assigned to specific
job, specific customers, specific orders, specific projects, and specific contracts. Job costing is
preferable to small and medium–sized companies, such as professional services (e.g. medical, legal),
advertising ... Show more content on Helpwriting.net ...
The ABC method means that all the individual activities part of a process can be accurately cost.
This is what Super Bakery needs to set the value of the company based on the activities of
individual assets (management, staff, manufacturing and warehouse). The activity– based cost
system allows the company to identify where high (and low) costs are being incurred and the cause.
How can a company survive with a 20% growth rate in twenty year duration? The desire to change
was required and ABC is the best cost system for Super Bakery. The ABC method helps with future
product planning and the cost of all activities associated with a product or service can be accurately
determined before it is launched. This can help with determining pricing, and any associated
expenditures of the company. The objective was to move from the concept of job cost system that
the company mimicked. The notion of job order is a disadvantage to Super Bakery. The order cost of
its customers was at a fixed cost. The problem exist as the orders with high margins subsidized low
margins. Profit margins are not recognized by the cash flow produced by order. A process cost
system could be used by the company but will impose disadvantages. Process costing advantages
include the ability for companies to create a cost for products where it is difficult to track cost flows
for each
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31.
32. Introduction. Muddled Is An Acfi2003 Student And As Many
Introduction
Muddled is an ACFI2003 student and as many others has problems with several aspects of the
course including a fundamental principle, the differences in the costing systems and cost
management systems. The purpose of this essay is help Muddled understand the fundamental
costing principle that management systems should reflect the fact that different costs are relevant for
different purposes, and how this principle affects the way that job costing and process costing
systems are designed. Along the way several costing concepts will be explained and laid out for
Muddled to understand in a more simplified method. The axiom will be covered first with particular
reference to the costing systems, the differences between the job ... Show more content on
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2.2 Job Costing System vs. Process Costing System
The main differences between a job costing system and a process costing system can be summarised
to the cost objects used, the size of the job and production, identification of the product, whether
work in progress is present at the start of the period, the method of cost accumulation used and when
cost are asserted.
2.2.1 Cost Objects
Muddled needs to understand that cost objects is something that is assigned costs and has a direct
link to those costs.
Job costing systems are used by firms who make special orders or customised products with
individual identities for each job with regards to singular contract specifications. The cost object
being the individual unit/s or product in that contract. This is due to each job using different
amounts of resources and is allocated specifically to the individual job, thus the specific job is the
cost object that has the costs directly assigned to, at the completion of the job.
Process costing systems are applied when there is a mass production of similar products, in a
continuous flow; though one or multiple departments; thus the products having no identity. The
process or department used to make these products are assigned the costs at the end of a cost period
rather
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33.
34. The Deregulation Of Pre Privatised Governmental Industries
Since the 1980s businesses has bear witness to the dramatic changes within the manufacturing and
service environment, due to the deregulation of pre–privatised governmental industries. In
retrospect, this caused companies to reassess their strategies to reflect the evolving competitive
environment. Immediately, companies were faced with the task of producing the same quality goods
at a competitive global price. Globalisation, meant that customers had the ability to shop around for
competitive prices, meaning that companies had to base their whole business around customer
satisfaction. In order for business to survive they needed to adapt, meaning they had to find new
techniques to keep cost low, whilst at the same time remaining ... Show more content on
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Initially, this could lead to management reducing direct labour hours, to reduce product costs. As a
consequence, this could have dire effects on efficiency and quality of products, as the only way to
reduce labour overheads would be to either use less skilled labour or reduce the amount of workers
administering to the prod–uct.
Traditional costing (absorption) allocates all costs associated related to the manu–facturing process.
These costs are then allocated using the overhead absorption rate, which is calculated by dividing
budgeted total activity by total budgeted activity. It should be noted that total budgeted activity
depends wholly on what method of allocation as company uses. Which you would usually find to be
either labour hour or machine hours. In order to gain a clear understanding of absorption costing, it
is important to understand what an overhead are; since the method of allocation over–heads is what
the costing system is based upon. Overheads, also known as direct costs are expenditure which
cannot be ''economically identified with a specific saleable cost unit'. Furthermore, Overheads are
important to management because they want a clear understanding of what caused costs to occur.
Traditional costing is based upon three main objectives. The first process allows, management to
group costs by
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35.
36. Cost Accounting Project
[Type the document title]
[Type the document subtitle]
[Type the abstract of the document here. The abstract is typically a short summary of the contents of
the document. Type the abstract of the document here. The abstract is typically a short summary of
the contents of the document.]
compaq
[Type the company name]
[Pick the date]
Contents
Concept of Cost 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 ... Show more content on Helpwriting.net ...
With the help of case studies of Siemens Electric Motor Works, John Deere Component Works, and
Schrader Bellows, Cooper (1989) demonstrated that the 'management objectives' and 'diversity of
product mix' determine the extent of the complexity in the design of activity–based cost
management systems. The competitive environment in which the firm is operating, drives the need
for activity–based costing.
A well–designed integrated cost management system will help the management of the company to
identify opportunities for continuous improvement and point out unused capacity or capacity
constraints, if any, and will facilitate the introduction of activity–based budgeting in the
organization. The activity–based budgeting mindset makes all cost variable and attempts to match
resource supply with resource demand.
Activity based costing Activity Based Costing (ABC) is a two–stage product costing method that
assigns costs first to activities and then to the products based on each product 's use of activities. ,
ABC systems first accumulate overhead costs for each organizational activity, and then assign the
costs of the activities to the products, services, or customers (cost objects) causing that activity.
37. Activity analysis is the processes of identifying appropriate output measures of activities and
resources (cost drivers) and their effects on the costs of making a product or providing a service.
In this way an
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38.
39. Production Overheads Based On Direct Labour Hours Essay
Costing
At present PC4U apportions its production overheads based on direct labour hours. With a range of
products available and opportunity for customising these products individually to meet the retailer's
needs, this report aims to assess the effectiveness of this traditional method of allocating production
overheads. It will discuss the drawbacks of the current approach used by PC4U, as well as an
alternative approach in the Activity–Based Costing system, which "is intended to overcome the
weakness of the traditional method by having various pools of costs and then allocating each pool's
costs on the basis of its root cause."(Averkamp 2007) As well as comparing the benefits and
drawbacks of these costing systems to determine what recommendations should be given regarding
the approach PC4U should adopt, the report shall also discuss the impact an activity based
management system may have on the company.
The current method of apportioning production overheads based on direct labour hours can be
described as a traditional approach to product costing. In a manufacturing company's financial
statements, each item produced must be allocated some of the production overheads to make the
statements compliant. Sometimes the individual costs of these items can be calculated incorrectly
based on overall production overhead and the system of allocating in place, however the overall
financial statement can still be accurate. This traditional method of allocating the production
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40.
41. Compages And Disadvantages Of Costing Systems
Costing Systems
The costing systems aid companies in determining the cost of a product in relation to the revenue
the product generates. The costing systems commonly used in businesses include activity–based
costing and traditional costing. Traditional costing system assigns the manufacturing overhead based
on the capacity of a cost driver. For example, the amount of direct working hours required to
produce a particular item. Cost drivers are factors that cause cost to incur, like machine hours, direct
material hours, and direct labor hours. Activity–based costing system allocates cost of
manufacturing a product in accordance to the activities required to produce the particular item. It's
therefore essential for managers to understand the merits ... Show more content on Helpwriting.net
...
For example, in a banking context, the activity of a bank teller is ascribed to each item through
measuring how long each item transaction (cost driver) takes at a counter and them measuring the
number of each form of transaction. In a machinery context for the activity of running machinery,
the driver is often the machine operating hours i.e. machine operating hour's maintenance, power
cost in the running of machinery and labor cost activities.
ABC systems use activities as the main cost objects. The system works on the notion that activities
cause costs, and cost objects create demand for activities. The system is flexible as it relates costs to
customers, management responsibility and processor and not just the products. ABC system applies
activities as the basic cost objects while using the costs of such activities as the building blocks for
compiling costs of other cost objects.
The application of activity based costing system embraces advanced planning, control and
monitoring system that encompasses: activity based costing; activity–based budgeting; activity
reporting; activity–based cost management; performance benchmarking and measurement;
customer/product and sector profitability, business process re–engineering; and continuous
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42.
43. Sample Resume : Managerial Accounting
MASTERS IN PROFESSIONAL ACCOUNTANCY STUDENT NAME : Shilpa Thakran
STUDENT ID : 17909848
UNIT NUMBER : 530
REPORT :
MANAGERIAL ACCOUNTING
TUTOR NAME : CHEOW WING WONG
DUE DATE : September 12, 2014
TABLE OF CONTENT
INTRODUCTION...........................................................................................3
1.0 PRODUCT COSTING..................................................................................4
1.1 JUST IN TIME APPROACH.....................................................................................4
1.2JUST IN TIME APPROACH IS DISTINCT FROM PRODUCT COSTING....................4
1.3 USES OF PRODUCT COSTING..................................................................................5
1–4 IMPORTANCE OF ... Show more content on Helpwriting.net ...
Product costing emphasizes on cost allocation which incurred at the time of manufacturing to the
final product and Just in time approach involves ordering of material as per need and have no
inventories at the end. Traditional costing based on manufacturing and assumptions. Activity based
costing is time consumable and is suitable for both manufacturing and non–manufacturing
businesses.
If companies reports are showing less profit for most efficient products and more profit for the
product the company is not efficient in making then there is a need to adopt product costing.
The report also covers how managerial accounting and financial accounting differ and why
managerial accounting cannot be replaced by financial accounting. These branches of accounting
differ in various ways like managerial accounting is more future–oriented while financial accounting
based on past records. Also, managerial accounting is made for internal users like managers while
financial accounting focus more on external users.
The purpose of the report is mainly to through light on various aspects of managerial accounting like
the uses and purpose of managerial accounting and how its different approaches helps in increasing
profits and controlling costs and wastages that incur during production. The company in the given
issue is not following product costing due to which the company has little influence over the product
price and in a competitive environment
46. Accounting 3320-001 Final Exam
FINAL EXAM REVIEW
ACCT 3320 –001
Spring 2015
I. FINAL EXAM TIME AND LOCATION:
Location: SB 2100
Time: 12:30 PM – 2:30 PM on Tuesday (May 05, 2015)
II. FINAL EXAM POLICY:
Please note the exam is closed book and closed note exam.
You are allowed to bring pens, a two–sided cheat sheet (8.5 x 11 inches), pencils, simple function
calculators to the exam.
III. EXAM FORMAT:
There are 35 multiple choice questions including both conceptual and calculation questions.
The exam will be done through My Accounting Lab.
IV. FINAL EXAM COVERAGE
Final Exam covers the following chapters:
Chapter 4: Job Costing
Chapter 5: Activity–Based Costing and Activity–Based Management
Chapter 8: Flexible Budgets, Overhead Cost Variances, and ... Show more content on
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Mynarc uses budgeted fleet hours to allocate variable manufacturing overhead. The following
information pertains to the company 's manufacturing overhead data:
Budgeted output units 675 truckloads
Budgeted fleet hours 540 hours
Budgeted variable manufacturing overhead costs for 675 loads $82,350
47. Actual output units produced and delivered 630 truckloads
Actual fleet hours 436 hours
Actual variable manufacturing overhead costs $77,490
4. What is the flexible–budget amount for variable manufacturing overhead?
A) $83,025
B) $82,350
C) $76,860
D) $77,490
5. What is the flexible–budget variance for variable manufacturing overhead?
A) $4,860 favorable
B) $4,860 unfavorable
C) $630 favorable
D) $630 unfavorable
6. What is the budgeted variable manufacturing overhead cost per unit?
A) $183.00 per unit
B) $178.89 per unit
C) $119.25 per unit
D) $122.00 per unit
Answer the following questions 7–9 using the information below:
The Kenton Company processes unprocessed milk to produce two products, Butter Cream and
Condensed Milk. The following information was collected for the month of June:
Direct Materials processed: 18,000 gallons (after shrinkage)
Production:
Butter Cream
7,500
gallons
Condensed Milk
10,500
gallons
Sales:
Butter Cream
7,000
gallons
Condensed Milk
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48.
49. Abc Is a Better Principle Than Traditional Cost System
[pic]
Activity–based costing (ABC) is a better principle for companies than a traditional cost system.
Discuss.
Student Name: Zhang Ruoshi Assignment Title: Essay Module Code: LZ118–122 Module Teacher:
Rebecca
Manufacturing is one of the company 's core processes, while accounting is the key impact for
enterprise to produce good products. Activity–Based Costing (ABC) is a new method of costing
system. This method can help a company to allocate costs more accurately in today 's complex
business world. In contrast to traditional cost system which is not suited to new manufacturing
environment situation, ABC has taken the place of tradition system and been widely used in some
countries, ... Show more content on Helpwriting.net ...
They can contrast the profits which are brought by a variety of customers, products, brands or
regions. Afterward, they can choose the most profitable ones (Cooper and Kaplan, 1991 p.130–135).
Innes and Mitchell (1995) explored the adoption rate of ABC and how well does this system work in
some large companies of UK. Innes and Mitchell (1995) undertook a survey of ABC practice in
1000 of the largest companies in the U.K. which are listed in The Times 1000 which was published
in 1994. Nevertheless, the results showed that ABC system's impact is often limited and it has also
been refused by a high percentage. The survey also considered both the company sector and size.
Most of the companies have to make decisions on its use. There is still possibility for considerable
increasing in its adoption. ABC is an on–going development, it gives considerable chances for
researches who are interested in changing to pursue work different kinds of management accounting'
area. (Innes and Mitchell, 1995) This survey proves that ABC has been adopted by some U.K.
companies and these companies are trying to use ABC to make big progress. On the other hand, the
results also show that, at a practical level, opinions on ABC are differed among the U.K.'s large
companies.
In contrast to the survey of largest companies in the U.K., Douglas (1999) investigated how to make
ABC work in the small and mid–sized
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50.
51. Office Dakota Products Case Analysis
Office Dakota Products Case Analysis Course: BUSA 5061 Managerial Accounting Students Name:
Teresa Willette Professors Name: Dr. Conner/Dr. Pollard Date 3/20/2011 Executive Summary The
following analysis is written for Dakota Office Products to evaluate current business operations and
recommend future actions necessary to ensure company success. In the analysis of the company we
will identify inefficient business practices that have led to the companies first profit loss in its
history. We will evaluate the companys current pricing structure, ordering methods, shipping 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 ... Show more content on
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The key issue presented in front of the management is the possible steps to be taken by the
management in order to avoid such losses. Critical Thought The issue addressed by the accounting
system of Dakota office products invites our attention to the premise of Activity Based costing
methodology. We are certain about the fact that the accounting and reporting system at Dakota
Office Product is inappropriate and is leading to the company making wrong decision ultimately
leading to losses. This was apparent from the record where the company was able to increase its
sales without a corresponding increase in the profits for that particular year. Activity based costing
system is an approach which seeks to allocate the overhead cost to the products on a scientific and
realistic basis. The existing system of allocating cost at Dakota Office products were inadequate in
so much so that it was following an unreasonable basis for allocating the cost, which were known
and visible, such as the desktop delivery cost. The existing system was suffering from oversight of
some of the expenses. ABC costing system seeks to overcome the problem of oversight and make a
more reasonable allocation of the costs. The distinctive feature of this method is the fact that the
method can provide useful insights to the management as to the activities which are leading to the
cost by
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52.
53. Activity Based Costing
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
Problems with conventional product costing systems
Failure to adapt to the changing business environment
Increasing levels of non–volume–driven manufacturing overhead costs
Increasing ... Show more content on Helpwriting.net ...
Depends on the purpose of the system, which depends on the needs of management
A decision to include activity–based management in an ABC system will influence the range of
costs included in the system, as well as the type of cost drivers identified
Activity–based hierarchy of costs and activities
Unit level activities
Performed for each batch of product
Batch level activities
54. Performed for each batch of product
Product level (or product–sustaining) activities
Performed for specific products or product families
Facility level (or facility–sustaining) activities
Not usually included in product costs
Activity–based versus conventional product costs
Conventional product costing assumes product costs are driven by volume–based cost drivers
Conventional costing ignores batch size
Units produced in large batches consume a relatively low consumption per unit of batch costs
ABC may include
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55.
56. Job Order and Process Costing Systems
1. | Question : | (TCO F) Assume there is no beginning work in process inventory and the ending
work in process inventory is 100% complete with respect to materials costs. The number of
equivalent units with respect to materials costs under the weighted–average method is: | | | Student
Answer: | x | the same as the number of units put into production. | | | | less than the number of units
put into production. | | | | the same as the number of units completed. | | | | less than the number of
units completed. | | Instructor Explanation: | Chapter 4 | | | | Points Received: | 5 of 5 | | Comments: |
Great job | | |
2. | Question : | (TCO F) Process costing would be appropriate for ... Show more content on
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| Question : | (TCO F) The journal entry to record the incurrence of indirect labor costs is: | | |
Student Answer: | | a Wages Payable | XXX | | | Manufacturing Overhead | | XXX | | | | | | | | | b Work
In Process | XXX | | | Wages Payable | | XXX | | | | | | | x | | c Manufacturing Overhead | XXX | | |
Wages Payable | | XXX | | | | | | | | | d Wages Payable | XXX | | | Work in Process | | XXX | | | | | | |
Instructor Explanation: | Chapter 3 | | | | Points Received: | 5 of 5
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57.
58. Activity Based Costing
Topic Gateway Series
Activity Based Costing
Activity Based Costing
Topic Gateway Series No. 1
1
Prepared by Stephanie Edwards and Technical Information Service
Revised November 2008
Topic Gateway Series
Activity Based Costing
About Topic Gateways
Topic Gateways are intended as a refresher or introduction to topics of interest to CIMA members.
They include a basic definition, a brief overview and a fuller explanation of practical application.
Finally they signpost some further resources for detailed understanding and research. Topic
Gateways are available electronically to CIMA Members only in the CPD Centre on the CIMA
website, along with a number of electronic resources.
About the Technical Information ... Show more content on Helpwriting.net ...
While using such a simplistic volume measure to allocate overheads as an overall cost driver, this
approach seldom meets the cause–and–effect criteria desired in accurate cost allocation. This
method of costing has become increasing inaccurate as the relative proportion of overhead costs has
risen. This distortion of costs can result in inappropriate decision making. ABC is therefore an
alternative approach to the traditional method or arbitrary allocation of overheads to product,
services and customers.
Stage 1. Activity cost pools Material Handling
Stage 1. Activity cost pools Cost per material movement
59. OVERHEAD COSTS
Procurement
Cost per purchase order
Product lines
Set–up
Cost per set–up
Figure 1. Framework of activity based costing
4
Topic Gateway Series
Activity Based Costing
Application
In contrast to traditional cost accounting systems, ABC systems first accumulate overheads for each
organisational activity. They then assign the costs of these activities to products, services or
customers (referred to as cost objects) causing that activity. The initial activity analysis is clearly the
most difficult aspect of ABC. Activity analysis is the process of identifying appropriate output
measures of activities and resources (cost drivers) and their effects on the costs of making a product
or providing a service. ABC systems have the flexibility to provide special
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60.
61. Activity Based Costing 12
Activity–Based Costing
Activity–Based Costing
Activity based costing (ABC) is a costing method that is designed to provide managers with cost
information for strategic and other decisions that potentially affect capacity. Activity based costing
is a subset of activity–based management. Activity based costing is used to determine product costs
and for internal decision–making and for managing activities. Traditional Absorption costing is for
external financial reporting.
Activity–based costing is a suitable and appropriate method for companies with multiple products or
services who are having problem of inaccurate costing information and need to know which
products are really profitable and which are the one that is making loss. For ... Show more content
on Helpwriting.net ...
Secondly, these activities are traced to the products, services, or customers for whom the activity is
performed.
In conclusion, ABC stands out by breaking down the costs into a very detailed level. This
information will give management a very clear picture of which processes come with high costs but
little value and how to improve the process or to eliminate the process entirely. This method is
suitable for use when there is high overhead, complex product and in very competitive market.
Difference between Activity–Based Costing and Traditional Absorption approach
Activity based costing systems accumulate costs into activity cost pools. These are designed to
match to the major activities or business processes. The costs in each cost pools are largely caused
by a single factor called the cost driver. Whereas in traditional costing, systems accumulate costs
into facility–wide or department cost pools. The costs in each cost pool are different. There are
many costs of different processes, which are not caused by a single factor.
Activity based costing systems allocate costs to products, services, and other cost objects from the
activity cost pools using allocation bases corresponding to cost drivers of activities cost. Whereas in
traditional costing, systems allocate to products using volume–based allocation bases, for example,
units, direct labor, machine hours or revenue dollars.
In terms of hierarchy of costs, activity based costing allows for
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62.
63. Quantitative Techniques Used By Marketing Costing, Time...
Abstract– In today's competitive world, apart from a few isolated cases (e.g. luxury goods), the
selling price of a product is predefined by the market because customers are not willing to pay more
than a certain amount of money for the product. Hence cost is one of the most influential factors in
the outcome of a product or service. Hence over the past years different costing techniques are
evolved such as operation based approach, case based, break down approach, feature based costing,
Activity based costing, time–driven activity based costing etc. These techniques are classified based
on techniques with similar features. They are mainly classified into qualitative techniques and
quantitative techniques. Qualitative cost estimation techniques are based on a comparison analysis
of a new product with the products that have been manufactured previously in order to identify the
similarities in the new one. Whereas the quantitative techniques are based on a detailed analysis of a
product design, its features, and corresponding manufacturing processes. Therefore quantitative
techniques are more preferred. Time–driven activity based costing is a relatively new tool based on
quantitative technique.
This article provides a comprehensive literature review of Time–Driven Activity Based Costing
(TDABC), which is used to improve the cost allocation to products in manufacturing industry. This
paper presents evolution of costing techniques and TDABC. It also gives detailed description
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64.
65. Process Costing
Process costing
Process costing is a system which mostly practices by a company whereby the manager of the
company wants to know the cash flow from one department to another. Process costing give a
clarify information to managers, therefore this activities is very important.
Process costing is consisting of three ingredients which are direct materials, direct labor and
manufacturing overhead. Direct material is the raw material which needs to produce a product, for
example rubber for shoes, plastics for straws and etc. direct labor is a person who work and
complete the product before it is completely produce. And manufacturing over head is about the
indirect materials, indirect labor, and some indirect related to the factory.
For ... Show more content on Helpwriting.net ...
In a weighted average method the equivalent units of production for a department are the number of
units transferred to the next department of finished goods plus the equivalent units in the
department's ending work in process inventory.
First–in–First–out (FIFO) Method
The computation of equivalent units under FIFO method differs from weighted average method in
two ways. First the units transferred out figure are divided into two parts. One part consists of the
units from beginning inventory that were completed and transferred out, and the other part consists
of the units that were both started and completed during the current period. Second full
consideration is given to the amount of work expended during the current period on units in the
beginning work in process inventory as well as units the ending inventory. Thus, under the FIFO
method, it is necessary to convert both beginning and ending inventories to an equivalent unit basis.
For the beginning inventory, the equivalent units represent the work done to complete the units; for
the ending inventory, the equivalent units represent the work done to bring the units to a stage of
partial completion at the end of the period (the same as with the weighted average method). The
formula for computing equivalent units of production is more complex under FIFO method than
under weighted average
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66.
67. Acct745 Week 2
Running Head: ACTIVITY–BASED COSTING
Activity–Based Costing
Adriana Vlasin
Davenport University
ACCT745
Larry L. Simpson CPA, CGMA
March 1, 2015
Abstract
This paper provides a brief presentation of Activity–Based Costing methodology, how is used as
well as its short comings.
Activity–Based Costing
Activity–based costing (ABC) methodology is an instrument designed to provide accountants and
managers with valuable costing information that will allow them to make sound strategic decisions.
It is used as a secondary methodology rather than a replacement for the company's primarily costing
system. The ABC methodology identifies activities in an organization and for each activity it assigns
a cost. The cost reflects the actual resource consumption by each activity that has been identified.
Under a traditional system, overhead cost is allocated to an activity based on hours or rates for direct
labor or machine usage. However, this approach does not clearly indicate how much overhead cost
will be needed in order to complete a job through a particular function. ABC methodology is to be
used as an alternative to traditional accounting where a business 's overhead costs (indirect costs
such as electrical energy consumption for heating or cooling, or indirect cost associated with
marketing) are allocated as a proportion of direct costs, to an activity. This approach is
unsatisfactory because there can be cases where two activities could absorb the same direct costs
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68.
69. Activity Based Costing From The Perspective Of Competitive...
ACTIVITY BASED COSTING FROM THE PERSPECTIVE OF COMPETITIVE ADVANTAGE:
A STUDY OF NIGERIAN MANUFACTURING FIRMS
Anyadiegwu Peace Ebele1, Prof. Ifurueze Meshach S. 2
1, 2 Department of Accountancy Chukwuemeka Odumegwu Ojukwu University (COOU) Igbariam,
Anambra State
Email: ebele_okpala@yahoo.com Phone: +2348038947784
ABSTRACT
The focus of this study was to examine activity based costing from the perspective of competitive
advantage. ABC can support the strategic management process and provide significant benefit to
organizations. This examination utilized the contingency theory as a theoretical basis for the study.
Descriptive survey design was adopted. The data gathering instrument employed for this study is a
structured questionnaire. Data are analyzed through SPSS version 16. Reliability analysis using
Cronbach's alpha value was applied on data collected. Factor analysis was employed using principal
component method followed by Varimax with Kaiser Normalization, to find the factors or
dimensions that explain variances by the data set. The factor analysis is based on four dimensions,
namely, overall performance, strategic cost allocation method, increased efficiency and increased
effectiveness having the factor loadings of over ±0.3. The regression results are positive and
significant at the 5% level. Findings reveal that there is no statistically significant difference in cost
reduction attained by ABC over Traditional costing, though ABC tended to have higher effect.
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70.
71. Hampshire Company As A Tool For Measure The Business Activity
The Hampshire Company was evaluating on which cost system would best fit their needs as a tool
to measure the business activity. When conducting this process, Hampshire Company took a look at
traditional cost method versus activity based costing. Traditional Cost method is defined as "The
traditional method of cost accounting refers to the allocation of manufacturing overhead costs to the
products manufactured. The traditional method (also known as the conventional method) assigns or
allocates the factory 's indirect costs to the items manufactured on the basis of volume such as the
number of units produced, the direct labor hours, or the production machine hours. We will use
machine hours in our discussion. By using only machine hours to allocate the manufacturing
overhead to products, it is implying that the machine hours are the underlying cause of the factory
overhead. Traditionally, that may have been reasonable or at least sufficient for the company 's
external financial statements. However, in recent decades the manufacturing overhead has been
driven or caused by many other factors. For example, some customers are likely to demand
additional manufacturing operations for their diverse products. Other customers simply want great
quantities of uniform products. If a manufacturer wants to know the true cost to produce specific
products for specific customers, the traditional method of cost accounting is inadequate."
AccountingCoach. (n.d.). "An advantage of using
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72.
73. Process Costing
EXERCISE 3–1: Process Costing and Job–Order Costing [LO1]
Which method of determining product costs, job–order costing or process costing, would be more
appropriate in each of the following situations? * a. An Elmer's glue factory. * b. A textbook
publisher such as McGraw–Hill. * c. An Exxon oil refinery. * d. A facility that makes Minute Maid
frozen orange juice. * e. A Scott paper mill. * f. A custom home builder. * g. A shop that customizes
vans. * h. A manufacturer of specialty chemicals. * i. An auto repair shop. * j. A Firestone tire
manufacturing plant. * k. An advertising agency. * l. A law office.
EXERCISE 3–2: Job–Order Costing Documents [LO2]
Cycle Gear Corporation ... Show more content on Helpwriting.net ...
* a. $80,000 in raw materials were purchased on account. * b. $71,000 in raw materials were
requisitioned for use in production. Of this amount, $62,000 was for direct materials and the
remainder was for indirect materials. * c. Total labor wages of $112,000 were incurred. Of this
amount, $101,000 was for direct labor and the remainder was for indirect labor. * d. Additional
manufacturing overhead costs of $175,000 were incurred.
Required:
Record the above transactions in journal entries.
EXERCISE 5–1: Fixed and Variable Cost Behavior
Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed
weekly expense of a coffee stand is $1,200 and the variable cost per cup of coffee served is $0.22.
Required:
* 1. Fill in the following table with your estimates of total costs and cost per cup of coffee at the
indicated levels of activity for a coffee stand. Round off the cost of a cup of coffee to the nearest
tenth of a cent.
2. Does the average cost per cup of coffee served increase, decrease, or remain the same as the
number of cups of coffee served in a week increases? Explain.
EXERCISE 5–3: High–Low Method
The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical costs of
the hotel and the number of occupancy–days over the last year. An occupancy–day represents a
room rented out
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74.
75. The Costing Method Is An Accounting Process
A1. Costing Method Costing Method is an accounting process that assesses itemized input costs of
production and fixed costs to determine overall costs of production. (Kucera, n.d.) Competition
Bikes is performing this analysis so management can determine the optimum sales units to
breakeven from its San Diego plant based on the current sales mix of 9 Titanium bicycles for every
5 CarbonLite bicycles produced. Traditional costing is an easily implemented costing method that
aligns with generally accepted accounting principles, GAAP. Traditional costing is the distribution
of manufacturing overhead costs across the number of products produced based or another volume
based metric. Traditional costing is very simplistic in the fact that it doesn't allocate out any
nonmanufacturing costs. Traditional costing allocates costs to generic buckets such as direct
material, direct labor and other overhead. Activity based costing (ABC) was developed as a costing
method to overcome the weaknesses of traditional costing. ABC allocates costs to every activity, or
manufacturing task, associated in the production of an item. ABC is more accurate than traditional
costing. Competition Bikes grouped the following as tasks associated with the manufacturing of
bicycles; Factory Setups, Quality Control, Engineering Service, Product Movements, Utilities, and
Depreciation. (Johnson, n.d.) In Competition Bikes data analysis of traditional verses activity based
costing, the differences in costs is
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76.
77. Acct Chap 13 Kimmel
In January, Reyes Tool & Dye requisitions raw materials for production as follows: Job 1 $960, Job
2 $1,630, Job 3 $720, and general factory use $680. During January, time tickets show that the
factory labor of $6,100 was used as follows: Job 1 $1,570, Job 2 $1,940 Job 3 $1,670, and general
factory use $920. Prepare the job cost sheets for each of the three jobs. (If answer is zero, please
enter 0, do not leave any fields blank.) Job 1 Date 1/31 1/31 Direct Materials 960 0 Job 2 Date 1/31
1/31 Direct Materials 1630 0 Job 3 Date 1/31 1/31 Direct Materials 720 0 0 1670 Direct Labor 0
1,940 Direct Labor 0 1570 Direct Labor
In March, Hollaway Company completes Jobs 10 and 11. Job 10 cost $28,110 and Job 11 $32,630.
On March 31, Job 10 is ... Show more content on Helpwriting.net ...
6. Other manufacturing overhead consisted of indirect materials $14,000, indirect labor $20,000,
and depreciation on factory machinery $8,000.
Current year 's costs Balance 1/1 Current year 's costs Current year 's costs
30,000 11,000 43,000 48,000
36,000 18,000 48,000 55,000
43,200 21,600 57,600 66,000
109,200 50,600 148,600 169,000
Correct.
Prove the agreement of Work in Process Inventory with job cost sheets pertaining to unfinished
work. Hint: Use a single T account for Work in Process Inventory. Calculate each of the following,
then post each to the T account: (1) beginning balance, (2) direct materials, (3) direct labor, (4)
manufacturing overhead, and (5) completed jobs. Work in Process Inventory 1/1 Balance 128400
Completed Work Direct materials 121000 386200
Direct labor
139000
78. Manufacturing overhead 166800
12/31 Balance
169000
Work in process balance
$ 169000
Unfinished job No. 7642
$ 169000
Account/Description Manufacturing overhead Cost of goods sold Actual overhead costs Incurred on
account Indirect materials Indirect labor Depreciation $120,000 14,000 20,000 8,000 $162,000
Applied overhead costs Job 7640 Job 7641 Job 7642 $43,200 57,600 66,000 $166,800 $162,000
166,800 $4,800
Debit 4,800
Credit
4,800
Actual overhead Applied overhead
Prepare the adjusting entry for manufacturing overhead, assuming the balance is allocated entirely to
Cost of Goods Sold.
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79.
80. Voodoo Ltd Business Case Study
Introduction
Australia's food and beverage industry is anticipating significant growth, with a majority of food and
beverage executives expecting increases in revenues (84% of executives) (Thornton, 2013). For the
purposes of this report, the focus will be on the product costing systems in place at Voodoo Ltd,
concentrating on their applicability and effectiveness. Our aim is to identify the weaknesses in
Voodoo Ltd's current operations which may impede its growth in what is a dynamic and fast paced
industry. Currently Voodoo Ltd is in a battle to retain its momentum as a leading firm in the food
and beverage industry as it faces strong competition from competitors who are out performing them
in production rates and at lower prices ... Show more content on Helpwriting.net ...
Therefore according to Fisher and Krumiede (2012), relevant cost information is essential for
profitability analysis and strategic planning. For example, a few years ago, after implementing a
more detailed costing system, Nestlé SA Chief Executive Peter Brabeck made an unexpected and
alarming discovery: His company was producing 130,000 variations of its various brands, and 30
percent were not making money (Ball, 2007). Although almost two–thirds of Australian executives
(63%) believe that retailers reducing product range/varieties on their shelves will negatively affect
their businesses (Thornton, 2013). Voodoo Ltd has taken initiative and experienced exponential
growth in their new brands that they have created to attract new customers. However, Voodoo Ltd
should not lose focus from its signature products. Voodoo Ltd should look to reassess which brands
are not economically viable and remove them from production. ii. How a product costing system
could improve pricing of Voodoo Ltd's products
Product costing is the key to inventory valuation and pricing (Alnestig & Segerstedt, 1996).
Inventory valuation, which is usually prepared for accounting purposes, simply focuses on costs
incurred within the manufacturing of the products (Jiao & Tseng, 1999, as cited in Sheldon et al.,
1991). However, for longer–term decisions such
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81.
82. What Are The Strong Points Of Stewart Box Company's...
CRITICAL ISSUES
What are the strong points of Stewart Box company's current sytem?
Marketing
Stewart Box company differentiated itself from competition by focusing on custom–made orders
and targeting a small niche market only. By doing this they are able to actively cater to its
customer's individual wishes, and strictly adhere to promised delivery dates.
What are the weak points of Stewart Box company's current sytem?
Marketing Reach
Stewart Box Company has a very limited customer base. They only market their products within a
radius of about 500 miles from its factory, which was located in a fairly small town. A limited
customer base results to low volume of orders which will lead to the carton factory operating below
its capacity ... Show more content on Helpwriting.net ...
Therefore, it is very important for Stewart Box Company to be have slightly lower prices than its
competitors to be competitive in a very cutthroat industry.
RECOMMENDATIONS
Expand Market Reach
To address the underutilization of the carton factory, Stewart Box company needs to increase the
volume of their orders. They can do this by going beyond the their existing 500 mile marketing
radius. They can also further increase their volume by catering to not only custom made orders but
also catering to standard packaging sizes. By increasing sales, the capacity of the carton factory is
fully utilized, cost efficiency is improved, thereby improving the bottom–line figures of the
company.
Improve efficiency of factories
Stewart Box Company needs to address the Carton Factory operating under capacity. The
underutilization of this plant may cause inefficiencies in the company's operations thereby
increasing its standard costs. This inefficiency in operations is evident in the unfavorable variances
in the company's Income Statement and Spending Report.
83. Reevaluate Costing Method
The company should reevaluate their costing process. Costing based on estimates of annual standard
costs may be result to inaccurate cost estimates as cost of raw materials and manufacturing
equipment fluctuate within a year. The company needs to be more dynamic in their costing
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84.
85. Cost Accouting Systems for John Deere Component Works
Management Consultants
Report
Executive Summary
John Deere Component Works (JDCW) has been subject to a number of unsuccessful competitive
bids due to the inherent deficiencies of their existing costing system. This has illustrated the
importance of obtaining a thorough understanding of costs, and desirability of implementing a
superior costing system.
This report contains: * A general overview of the problems confronted by JDCW * An analysis of
the current standard costing system * An exposition of Activity Based Costing (ABC) * An
evaluation of the strengths and weaknesses of each system * Recommendations
Company Background
Deere & Company is an iconic American corporation, renowned for ... Show more content on
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Following this revelation, management attention was directed to the current costing system.
Traditional Costing System
JDCW employed a traditional standard costing system throughout its operations. This form of
costing permeated the industrial era, which was categorised by low overhead costs and the
production of a limited variety of goods. Standard costing involves allocating overheads to cost
objects using volume based cost drivers, such as machine or labour hours. Albeit easy to implement
and understand, this system frequently results in over costing and under costing. JDCW priced their
products based on full costs, which included all direct material, labour, overhead and period
overhead, using standard costing. Whilst this practice was satisfactory for internal transactions, the
inefficiencies were emphasised when JDCW sought to bid for parts against external suppliers.
Number of machine hours, direct labour hours and material dollars were used as overhead allocation
rates. By restricting the overhead rates to the aforementioned volume based activities, several
problems eventuated.
The Industrial Engineering department used pre–established standard hours for direct labour
86. runtime. Using standard hours produced costing discrepancies, especially because no emphasis was
placed on direct materials, overhead and period overhead costs. This was an insufficient method to
compare actual and standard percentages.
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87.
88. Advantages Of Traditional Costing System
Conventional Absorption Costing Systems or Traditional Costing System
It is a remarkable reality that the traditional costing systems use a solitary, volume–based cost
driver. This is the motivation behind why the traditional product costing system misshapes the
expense of items or products. By and large, this kind of costing system appoints the overhead
expenses to items on the premise of their relative use of direct work. Thus, traditional cost systems
frequently report incorrect product costs. The issue is in the basic technique of the traditional costing
systems. They stick to the supposition that items reason cost. Every time a unit of product is
produced, it is expected that cost be brought about.
This suspicion bodes well for certain ... Show more content on Helpwriting.net ...
For instance, a carrier may have sections like international operations, domestic operations, freight
operations, and so forth while an auto producer may have fragments like engine bicycles, autos,
trucks, SUVS, and so on. Portions are cost focus, income focus, benefit focus, or venture fixates
relying upon the way of their operations and the level of obligation given to the section
administration.
The central management gives the general bearing and procedure, however, a lot of choice making
is designated to the section administration. It is critical to effectively screen their execution, which is
measured by management accounting tools, for example, residual income, accounting rate of return,
return on investment, and so on. By dissecting these measurements, the concentrated administration
chooses whether to put in extra interest in a fragment in light of its fabulous execution or to strip
from a section when it is losing cash. These instruments are additionally valuable in looking at
execution of changed supervisors and in numerous organizations their compensation is connected to
the ROI or leftover wage, they
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89.
90. Process Costing
P E S Institute of Technology
Department of MBA
100 Feet Ring Road, BSK III Stage, Bangalore – 560 085
A TERM PAPER
On
Process Costing
Submitted in fulfillment of the requirements for the 3rd SEM MBA Management Accounting and
Control Systems
Submitted to: Submitted by:
Prof. G V M Sharma Vandana Rajput Dept. of MBA 1PB11MBA60
INTRODUCTION:
Process costing is a form of operations costing which is used where standardized homogeneous
goods are produced. This costing method is used in industries like chemicals, textiles, steel, rubber,
sugar, shoes, petrol etc. Process costing is also used in the ... Show more content on Helpwriting.net
...
The cost of each process is thus made up to cost brought forward from the previous process and net
cost of material, labour and overhead added in that process after reducing the sales value of scrap.
The net cost of the finished process is transferred to the finished goods account. The net cost is
divided by the number of units produced to determine the average cost per unit in that process.
Process Losses: In many process, some loss is inevitable. Certain production techniques are of such
a nature that some loss is inherent to the production. Wastages of material, evaporation of material is
un avoidable in some process. But sometimes the Losses are also occurring due to negligence of
Labourer, poor quality raw material, poor technology etc. These are normally called as avoidable
losses. Basically process losses are classified into two categories
(a) Normal Loss (b) Abnormal Loss
1. Normal Loss:
Normal loss is an unavoidable loss which occurs due to the inherent nature of the materials and
production process under normal conditions. It is normally estimated on the basis of past experience
of the industry. It may be in the form of normal wastage, normal scrap, normal spoilage, and normal
defectiveness. It may occur at any time of the process. No of units of normal loss: Input x Expected
91. percentage of
Normal Loss.
The cost of normal loss is a process. If the normal loss units can be sold as
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