ACCT346 Activity Based Costing

$4.75

ACCT346 Activity Based Costing
How does activity-based costing differ from the traditional costing appr…

SKU: ACCT 346 Activity-Based Costing Discussions Week 4 Categories: , Tags: , , ,

Description

ACCT346 Activity Based Costing

ACCT346 Activity Based Costing

Discussions Week 4 All Students Post 50 Pages

How does activity-based costing differ from the traditional costing approach? When would it give more accurate costs than traditional costing systems?  What are cost allocations? What are 4 main reasons companies allocate costs to products? Choose ONE and explain how this process would benefit management….

PROBLEM #1. Activity Based Costing (ABC):
(EVERYONE should do this problem and post a solution even if others already have.)
Harold Company makes two products and is implementing an Activity Based Costing (ABC) system. Previously, all overhead had been applied on the basis of machine hours. The Company produces 400,000 units of product A and 20,000 units of product B.
The problem is based on the following categories:
Cost Pool
a)Driver and Level
b)Cost in Pool
c) Use of Driver by Product A
d) Use of Driver by Product B
I Equipment Setup
a) 2500 setups
b) $2,000,000
c) 1,350 setups
d) 1,150 setups
II Materials Ordering
a) 50,000 orders
b) $5,000,000
c)20,000 orders
d)30,000 orders
III Quality Control
a)40,000 inspections
b) $900,000
c) 15,000 inspections
d) 25,000 inspections
IV Machining
a) 50,000 machine hours
b) $6,000,000
c) 10,000 machine hours
d) 40,000 machine hours
A) Using ABC what is the cost per machine hour in the Machining pool?
B) Using ABC what is the cost per setup in the Equipment Setup Pool?…